Significant Data Reports

February 14, 2018

Japanese real GDP expanded only 0.5% at a seasonally adjusted annualized rate last quarter, the weakest pace in eight quarters and down from 2.2% in 3Q and 2.5% in 2Q17. GDP still grew faster (1.6%) in 2017 than the prior year’s pace of 0.9%. The GDP price deflator went up merely 0.2% in 2017 and dipped marginally in the final quarter.

Euroland real GDP posted a non-annualized 0.6% increase last quarter, matching the flash indication. GDP rose 2.7% between the final quarters of 2016 and 2017 and on average climbed 2.5% last year. This beat the U.S. calendar year increase by 0.2 percentage points.

Fourth quarter-over-fourth quarter real economic growth among members of  the euro area was 2.9% in Germany, 3.1% in Spain and The Netherlands, 2.4% in France, 3.9% in Finland and Cyprus, 3.6% in Austria, 1.9% in Belgium and 1.6% in Italy.

Investors now await U.S. consumer price data, due shortly.

The dollar fell overnight by 0.5% against the yen, notwithstanding the aforementioned weak Japanese GDP results. The dollar also lost 0.6% relative to the kiwi but shows scant net overnight movement against the euro and other key traded currencies.

Stocks fell 1.0% in New Zealand and 0.4% in Japan but advanced by 2.1% in Hong Kong and 0.5% in China. European equities have mustered gains so far today of 0.9% in France, 0.7% in the U.K., 1.0% in Switzerland, and 0.6% in Italy and Germany.

Ten-year German bund and British gilt yields settled back two basis points each.

West Texas Intermediate crude oil fell 0.7% to $58.75 per barrel, whereas Comex gold at $1,334.2 per ounce has traded up 0.3%.

The Swedish Riksbank kept its repo rate unchanged at negative 0.5%, asserting that inflation pressures lately have been lower than forecast previously. New forecasts now project overall inflation of 1.7% this year, and a core CPI increase of 1.8%. The projected repo path is unchanged at -0.15% a year from now, 0.36% in the first quarter of 2020 and 0.88% a year after that.

The Bank of Thailand’s key interest rate was retained at 1.5%, its level since a pair of 25-basis point cuts in March and April of 2015. Domestic-demand pressures on inflation remain low, and the eventual rise of inflation is expected to be gradual.

Among Eastern European economies, real GDP advanced 0.6% in Romania last quarter and by 7.0% from a year earlier. Such went up 1.3% on quarter in Hungary and 4.8% on year. Polish GDP grew 1.0% from 3Q and and 4.3% on year.

Malaysian GDP climbed 0.9% on quarter and 5.9% on year in 4Q and was associated with a slightly bigger MYR 12.9 billion current account surplus.

On-year South African retail sales growth slowed to 5.3% in December. The month-on-month change was negative.

Chinese foreign direct investment in January was merely 0.3% greater than a year earlier. South Korean unemployment edged down 0.1 percentage point to 3.6% last month. Real GDP in Singapore posted 3.6% growth between the final quarters of 2016 and 2017.

Australian consumer sentiment according to an index compiled by Westpac fell 2.3% in February after January’s 1.8% improvement.

Eagerly awaited U.S. data proved mixed, with higher than forecast inflation but an unexpected setback in consumer buying.

  • CPI inflation did not settle back under 2% as forecast in January but instead held steady at 2.1%. Core CPI remained at 1.8%. Overall consumer prices recorded a 0.5% monthly increase.
  • Real average hourly earnings growth accelerated 0.2 percentage points to 0.8% in January.
  • Retail sales fell 0.3% on month in January and were flat when the auto sector is excluded.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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