China Releases a Whole Lot of Data as World Awaits Trump’s Inauguration

January 20, 2017

At 17:00 GMT (noon EST), Donald J. Trump will officially become the 45th president of the United States.

The dollar rose overnight by 0.6% against the New Zealand dollar, 0.4% versus the loonie, 0.3% relative to the Aussie dollar, yen and sterling, 0.2% vis-a-vis the euro and peson, and 0.1% against the yuan and Swiss franc.

Share prices in Asia rose 0.7% in China and 0.3% in Japan but fell 1.1% in India, 0.8% in Singapore, 0.7% in Hong Kong, and 0.4% in South Korea. The Australian and New Zealand markets slipped by 0.7% and 0.1%. In Europe, equities rose 0.6% in France and 0.3% in the U.K. and Spain but fell 0.1% in Germany and Switzerland.

10-year sovereign debt yields climbed 5 bps in Italy, 4 bps in France, and 3 bps in Germany and the U.K. but fell 2 bps in Japan. The 10-year U.S. Treasury yield in futures trading rose 3 bps to 2.50%. Fed Chair Janet Yellen made bullish remarks about the U.S. economy and believes around three rate hike in 2017 are plausible.

West Texas Intermediate oil increased 0.9% to $51.83 per barrel. Gold is trading 0.1% softer at $1,200.40 per troy ounce.

Power in the executive branch of the U.S. federal government transitions today. The new president promises a whirlwind of executive orders in the next day or so and is urging the Congress to repeal and replace the Affordable Care Act as quickly as possible.

Chinese GDP growth slightly surpassed expectations last quarter with a 1.7% quarter-on-quarter increase that lifted on-year growth to 6.8%. That the same as on-year growth in the final quarter of 2015 but down from 7.3% in 4Q14, 7.7% in 4Q13, 7.6% in 4Q12 and 8.1% in 4Q11. Average GDP growth last year of 6.7% was conveniently right in the middle of the government’s 6.5-7% target range and just 0.2 percentage points less than in 2015.

Other released Chinese data today showed

  • On-year 6.0% expansion in industrial production in both December and 2016 as a whole. Such compares in 5.9% in December 2015 and full-2015.
  • A 10.9% on-year rise of retail sales in December, which was a tad better than forecast. Retail sales advanced 10.4% in 2016 after 10.7% in 2015.
  • An 8.1% rise of fixed asset investment in 2016, down from 10.0% in 2015 and 15.7% in 2014. The government has been trying to rotate China’s economy away from its heavy reliance on business investment.

Japanese department store sales fell only 1.7% in the year to December. That’s the smallest on-year drop since July.

German producer prices posted a 1.0% on-year increase in December, most in 47 months. Energy went up 0.5%, while all other producer prices were 1.2% higher collectively than a year earlier. On average, the PPI still dropped 1.7% in 2016, following declines of 1.8% in 2015, 1.0% in 2014, and a mere 0.1% in 2013.

British retail sales volume plunged 1.9% in December, the biggest monthly drop in 44 months. The on-year advance of 4.3% was less than forecast and at a 3-month low. Sales last quarter exceeded their year-earlier level by a robust 5.6%, however. The British Retail Consortium estimates no on-year change ins same-store sales last month.

New home sales in Australia jumped 6.1% in November on top of a 3.8% rise the month before.

Irish producer prices rose 0.5% on month and 1.3% on year in December.

Danish consumer sentiment┬áin December fell to a 43-month low. The Greek current account deficit of EUR 1.19 billion in November was six times larger than October’s shortfall.

India’s index of leading economic indicators bounced up just 0.3% last month after sinking 1.2% in November.

The Central Bank of Chile late yesterday announced a 25-basis point cut of its key interest rate to 3.25%. That was the first change in a year.

Canadian retail sales and consumer price figures get released shortly.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without expressed permission.

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