Closing the Book on a Year of Surprise

December 30, 2016

The dollar and yen slipped on this final session of 2016. The U.S. currency rose 0.3% against the yen overnight but otherwise depreciated 0.5% against the euro and Swiss franc, 0.4% versus sterling, 0.3% relative to the loonie and Mexican peso, and 0.2% vis-a-vis the Chinese yuan.

Markets were shut in Russia, Ukraine, New Zealand and Australia and will be closing early in several other markets for the extended New Year holiday.

Equities around the Pacific Rim rose 1.1% in Taiwan, 1.0% in India and Hong Kong and 0.2% in China but fell 0.3% in Singapore, 0.2% in Japan, and 0.1% in Indonesia. In Europe, share prices have risen 1.0% in Greece, 0.4% in France and Italy, 0.3% in Germany and the U.K., but fallen 0.3% in Switzerland.

Comex gold ($1,157.80 per ounce) and WTI crude oil ($53.78 per barrel) are unchanged.

Ten-year German bund and Japanese JGB yields are two and one basis points higher.

Russia’s composite purchasing managers index rose 0.8 points to 56.6 in December, a 50-month high and 5.4 greater than last May’s reading. The services PMI score of 56.5 was at a 49-month peak.

The year is closing with several more instances of lessening deflation.

Spanish CPI inflation doubled to 1.5% in December according to a preliminary estimate from 0.7% in November.

Austrian producer price inflation became less negative in November at -0.2%, 0.4 percentage points less than in October. Such has been negative since early 2013.

Italian producer prices recorded an on-year drop of 0.3% in October, which was only half the slide in the year to September.

The Cypriot PPI dipped only 0.2% in the year to November versus a 1.9% plunge in the year to October.

Malaysian producer prices rose 1.1% on month and 2.2% on year in November. The PPI had edged up just 0.1% in the year to October.

South Korean CPI inflation, however, remained steady at 1.3% in December. And Greek PPI deflation deepened to -1.2% in November from -0.5% in October.

In the year between November 2015 and November 2016, Portuguese industrial production and retail sales increased 1.6%and 4.3%, respectively. Both indicators showed accelerated growth.

M3 money in the year to November expanded 6.3% in Australia and 4.76% in South Africa. Private credit growth in South Africa of 4.76% was less than forecast as was the increase in the money stock.

Business sentiment in The Netherlands improved 1.3 points to a reading of 4.7 in December, which was the best score since July.

Turkey accrued a $50.4 billion trade deficit over the first eleven months of 2016, 12% less than a year earlier.

The Chicago regional PMI report for December will be released within the hour. The city suffered a big increase in murders during 2016.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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