Christmas 2020

December 25, 2020

Among the very few markets open today, share prices rose 1.0% in China, 0.8% in Thailand, 0.4% in Taiwan and Turkey, but closed unchanged in Japan. The 10-year Japanese JGB yield edged a basis point higher, and WTI oil firmed 0.2%.

The dollar is unchanged against the euro and yen, down 0.2% versus the peso and sterling and by 0.1% relative to the Swiss franc, kiwi, and Aussie dollar and up 0.1% versus the loonie. Gold firmed 0.3%, and the price of a bitcoin broke above the $24k threshold.

A trade deal was reached between EU and British negotiators just in the nick of time, contingent on parliamentary approval by each party.

Still no U.S. fiscal stimulus, however.

From a data release perspective, Christmas is exceeded only by January 1st as the quietest day of the year, but Japan was again the perennial exception.

  • Japanese unemployment fell unexpectedly in November by 0.2 percentage points to 2.9%, a 4-month low. The on-year contraction of jobs narrowed to 0.8% from 1.4% in October.
  • Japanese retail sales recorded positive year-on-year growth for a second straight month. But the rise imploded to 0.7% from 6.4% in October, and there was a 2.0% monthly drop.
  • A 3.7% on-year slide in Japanese housing starts last month was the smallest decrease in almost one and a half years. Construction orders sank 4.7% on year.
  • Tokyo CPI deflation swelled to 1.3% in December, its most negative point since May 2010. Core CPI deflation of 0.9% following 0.7% in November and 0.3% in October was its most deflationary since September 2010.

Turkish business sentiment rebounded 2.8% this month to a 2-month high.

At the final policy meeting this year by the Central Bank of Egypt, the overnight deposit rate was left unchanged at 8.25%. There were three reductions during 2020: 300 basis points in March and 50 bps each in October and November. Officials lowered the inflation target for 2022 to 5-9%. CPI inflation accelerated 1.2 percentage points to 5.7% in November.

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


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