A Wide Mix of Data Reports on August’s Final Day

August 31, 2020

The dollar strengthened 0.5% against the yen, 0.3% versus the peso, and 0.2% relative to sterling but fell 0.3% against the euro and yuan, 0.2% vis-a-vis the loonie and Swiss franc, and 0.1% against the Australian dollar.

British markets are shut for the late summer bank holiday.

Share prices elsewhere advanced 1.1% in Japan but dropped by 2.1% in India, 2.0% in Indonesia, 1.2% in South Korea, 1.5% in New Zealand, 1.1% in Taiwan and 1.0% in Hong Kong. Spain’s Ibex is down 0.8%, while other European stock markets are up marginally.

Ten-year German bund and U.S. Treasury yields have ticked up 2 and 1 basis points, whereas their Japanese counterpart has slipped a basis point.

WTI oil rose 0.7%, but the price of gold settled back 0.4%.

The Chinese government-authorized purchasing managers composite index printed at a 2020 high of 54.5 in August, up 0.4 points compared to July’s level. Marginally slower growth in manufacturing was outweighed by a more significant acceleration of non-manufacturing activity growth.

An 8.0% monthly advance in Japanese industrial production in July prompted officials to slightly upgrade their trend assessment, but output nonetheless remained 16.1% below its year-earlier level after the 16.9% average drop between 1Q and 2Q. Moreover, other Japanese data releases today accentuated weakness:

  1. Retail sales fell 3.3% on month and 2.8% on year in July.
  2. Housing starts and construction orders were 11.0% and 22.9% below July 2019 levels.
  3. Consumer confidence dipped unexpectedly to a two-month low and very depressed reading of 29.3 in August.

Indian real GDP plunged by a record 23.9% last quarter, 5.5 percentage points more than forecast.

Turkish GDP dived 9.9% on quarter and 11.0% on year in the second quarter. Turkey’s trade deficit widened to $26.6 billion in January-July, versus $17.1 billion a year earlier. A quarter of the lira’s year-to-date depreciation of roughly 20% occurred this month.

Italian GDP growth was revised to a somewhat larger 12.8% quarter-on-quarter contraction in the second quarter. In year-on-year terms, GDP dropped 17.7% and had only risen 0.4% over the four quarters through the spring of 2019.

Portuguese GDP sank 13.9% on quarter in 2Q after a 0.4% dip in the first quarter, and such was 16.3% weaker than the second quarter 2019 level. Portuguese CPI inflation edged 0.1 percentage point lower in July to zero percent, and retail sales were 3.0% weaker than in July 2019.

Icelandic real GDP tumbled 9.1% on quarter and 9.3% on year in 2Q. Such had risen 2.6% in the previous year through the spring quarter of 2019.

Danish GDP dropped 6.9% in 2Q after a 2.0% slide in 1Q and recorded negative 8.2% growth from a year earlier.

Belgian GDP slumped 12.1% last quarter. The on-year growth rate swung from +1.4% in the second quarter of 2019 to -14.4% in the second quarter of 2020.

Polish GDP dropped 8.9% on quarter and 8.2% on year in 2Q20. Cypriot GDP declined 11.6% from the first quarter and by 11.9% compared to a year earlier.

Gre ek retail sales were 7.3% weaker in June than a year earlier, but Dutch retail sales in July surpassed their year-earlier level by 9.7%.

Swiss retail sales rose 0.7% in July and recorded a 4.1% year-on-year increase.

German consumer prices dipped 0.1% on month and were unchanged from a year earlier in August. In year-on-year terms, prices for services and food advanced 1.0% and 0.7%, but energy costs fell 6.3%.

Spanish and Italian consumer prices in August were each 0.5% lower than a year earlier.

Spain’s current account surplus narrowed sharply to EUR 0.3 billion in the first half of 2020 from EUR 8.6 billion a year earlier.

In July, South Korean industrial production and construction output were 2.5% and 0.6% lower than a year earlier. Retail sales that month were 6.0% lower than in June but 0.5% higher than a year earlier.

South African money and private credit growth slowed a bit in July.

Australian corporate earnings in 2Q recorded their largest quarterly increase (15.1%) in 14 quarters.

The ANZ New Zealand business confidence index fell by a sharp 10 points to -41.8 in August, and the NBNZ own activity index reading of -17.5 was twice as negative as it was in the prior month.

Although 17.4% lower than a year earlier, retail sales in Thailand retail sales recorded their smallest 12-month decrease since March during June.

Canadian producer prices posted their smallest 12-month rate of decrease (2.3%) in five months during July. Also that month, Canadian building permits fell 3.0% on month and 9.6% on year.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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