Typical Monthend Deluge of Data
September 30, 2019
On this final day of September and the third quarter, the dollar and sterling rose somewhat against other major currencies. The dollar is up 0.5% against the Swiss franc, 0.4% relative to the euro and kiwi, 0.3% vis-a-vis the yuan, 0.2% versus the Australian dollar and peso and 0.1% against the yen and loonie. Sterling has firmed 0.2% against the dollar.
Ten-year sovereign debt yields rose 2 basis points in Japan and a basis point in the United States but fell 2 bps in Great Britain and are steady in Germany.
WTI oil fell 1.6%, and the price of gold on the Comex dropped 1.1%.
Stock markets in the Pacific Basis closed with mixed results, dropping by 0.9% in China, 0.6% in Japan, and 0.4% in Australia, India, and Taiwan but rising 0.5% in Hong Kong, 0.9% in New Zealand and 0.6% in South Korea. The British Ftse is 0.1% softer, whereas Continental European bourses have risen modestly.
Japanese industrial production underperformed expectations sufficiently for officials to downgrade their trend classification to “is in a weak tone recently.” Output fell 1.2% on month and 4.7% on year during August. The year-on-year changes in Japanese housing starts (-7.1%) and construction orders (-25.9%) were each negative and worse than the results for July.
Japanese retail sales, in contrast, topped expectations by jumping 4.8% on month and 2.0% on year last month. Nonetheless, a published summary of the Bank of Japan’s Board meeting on September 18-19th revealed a more serious debate of whether to augment monetary stimulus than at prior policy review.
The government-compiled Chinese manufacturing purchasing managers index rose slightly in September but at 49.8 stayed below the 50 breakeven level for a fourth consecutive month. The Caixin manufacturing PMI of China advanced a full point to a 19-month high of 51.4. The government’s non-manufacturing PMI reading in September (53.8) matched July’s 8-month low.
South Korean industrial production fell 1.4% on month and 2.9% on year (a 6-month low) in August. However, on-year growth in retail sales rebounded from a -0.3% in July to +4.1% last month.
Malaysian PPI inflation was negative in August (-1.9%) for the tenth straight month.
The volume of German retail sales see-sawed down 0.5% in August following drops of 0.8% in July and 1.2% in May that had sandwiched a 3.0% advance in June. On-year growth in sales shrunk 2 percentage points to 3.2%.
German CPI inflation eased 0.2 percentage points to 1.2% in September, a 34-month low.
German on-year employment growth slowed to 0.7% in August from 0.8% in July and 1.0% in the second quarter. The number of unemployed workers fell 10k, but job vacancies also fell 9k. The jobless rate, which had bottomed at 4.9%, printed at 5.0% for a fifth straight time.
Spanish quarter-on-quarter growth in 2Q of 0.4% was a 3-year low and resulting in a smaller year-on-year growth rate of 2.0%. Spain’s first-half current account surplus was EUR 11.8 billion, EUR 1.3 billion smaller than in the first half of 2018. A mere 0.1% year-on-year rise in Spanish consumer prices this month was down from 0.3% in August and represents a 3-year low.
Italian CPI inflation of 0.4% this month matched August’s 33-month low. Italian unemployment of 9.5% last month was the lowest since November 2011.
A 0.2% drop in British real GDP during the spring quarter was confirmed, but on-year economic growth was revised marginally lower to 1.3%, a 5-quarter trough.
Britain’s second-quarter current account deficit of GBP 25.2 billion exceeded analyst expectations by about a third, and the first-half deficit of GBP 58.3 billion compares to a deficit of GBP 41.7 billion a year earlier.
The Swiss leading economic index dropped 2.3 index points in September and was 3.9 points below the level in July.
August PPI inflation of 6.6% in Iceland was at a 3-month high and of 0.9% in Hungary was also a 3-month high. A 0.8% on-year drop in Austrian producer prices was the biggest 12-month slid in 35 months, however.
Portuguese retail sales (+5.1%) and industrial production (-4.8%) produced very different results in August. Greek retail sales fell 2.4% on month and 3.0% on year in July.
Norwegian retail sales stagnated last month and was just 0.4% greater than in August 2018.
Euroland’s jobless rate declined 0.1 percentage point to 7.4% in August and was 0.6 percentage points lower than in August 2018.
New Zealand building permits unexpectedly rebounded 0.8% in August from a 1.3% monthly drop in July. Business confidence in New Zealand continued to deteriorate in September with a -53.5 reading after -52.3 in August, -44.3 in July and -38.1 in June.
Australia’s M3 money stock and private-sector credit were 3.6% and 2.9% greater in August than a year earlier.
South African M3 and private domestic credit growth of 7.45% and 6.86% each slowed in August to a 5-month low. South Africa that month also experienced its largest trade surplus in eight months, which was ZAR 6.84 billion.
Canadian producer prices rose 0.2% in August but recorded a 12-month decline for a third straight month, this time of 1.0%.
The Chicago Fed manufacturing purchasing managers index sank 3.3 points to 47.1 and was below the 50 no change level for the third time in four months.
The political fight between President Trump and House Democrats appears to be degenerating rapidly into a metaphorical fight to the death.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British GDP and current account, German CPI and unemployment, Japanese industrial production and retail sales