Active Day for Data Releases; U.S. Markets Closed for Memorial Day

May 31, 2021

First-quarter GDP data were reported by several countries.

Turkish GDP advanced 1.7% on quarter. This was the third consecutive quarter of positive growth following an 11.0% plunge in the second quarter of 2020, and it lifted the year-on-year growth rate to a 3-year high of 7.0%, exceeding analyst expectations. A 0.9% recovery of the beleaguered Turkish lira ensued.

Belgian real GDP rose 1.0% last quarter after dipping 0.1% in the prior quarter. Growth compared to the first quarter 2020 level was negative for a fifth straight period, but the drop of 0.6% was the smallest in that sequence and down from year-on-year plunges of 14.0% in 2Q 2020 and 4.9% in the final quarter of 2020.

Indian GDP was 1.6% greater in 1Q than a year earlier. That was the second straight on-year advance after a rise of 0.4% increase in 4Q 2020 and represents a continuing recovery from a 24.4% plunge in the year to 2Q 2020.

Portuguese real GDP sank 3.3% on quarter and 5.4% on year in 1Q 2021 despite back to back quarterly increases in the second half of 2020.

Austrian GDP last quarter got revised sharply lower from +0.2% estimated initially to -1.1%. Austrian GDP was also 5.5% weaker than a year earlier even through its level in 1Q 2020 had been only 0.2% higher than in 1Q 2019.

Icelandic GDP tumbled 5.2% on quarter and 1.7% on year, marking the fifth consecutive year-on-year decline.

Danish GDP dropped 1.3% both compared to the final quarter of 2020 and its year-earlier level.

Finnish GDP in 1Q was revised from +0.4% to -0.1% and resulted in a revised on-year growth rate of -1.0%.

Polish GDP rose 1.1% last quarter, trimming the year-on-year rate of contraction to 0.9% from 2.7%.

Today’s data deluge was not limited to GDP statistics. Other indicators of demand and production showed:

A monthly drop in South Korean industrial production of 1.6% in April yet a 30-month high in its year-on-year rise to 12.4%. South Korean construction output fell 0.8% on month, but that was associated with its smallest on-year decline (1.8%) in the last five months. Also, South Korean retail sales increased 2.3% in April from the prior month and by 8.6% versus April 2020.

Retail sales in Japan, by contrast, fell 4.5% on month but increased 12.0% year-on-year, which was the largest 12-month rate of increase in 289 months. Japan industrial production increased 2.5% in April, boosting the on-year advance to 15.4%, most since March 2012. Japanese housing starts and construction orders were 7.1% and 3.3% greater in April than a year earlier, but consumer confidence regressed to a 3-month low reading of just 34.1 in May.

China’s government-compiled manufacturing and non-manufacturing purchasing manager indices for May respectively fell to a 3-month low of 51.0 and rose to a 2-month high of 55.2. Since last summer, only in February was manufacturing growth weaker than in May.

Among price data reported today,

  • Spanish CPI inflation rose half a percentage point to a 51-month high of 2.7% in May, but core consumer price inflation remained very low at 0.2%.
  • German CPI inflation also increased half a percentage point to 2.5% in May. The inflation reading last December had been negative 0.3%.
  • Portuguese CPI inflation doubled to 1.2% in May, having been negative as recently as last November.
  • Producer price inflation in Hungary of 9.8% in April was the most in 176 months.
  • Belgian PPI inflation in April of 12.0% was the most in four years.
  • Malaysian PPI inflation jumped 3.9 percentage points to a 50-month high in April of 10.6%.
  • Canadian producer price inflation has accelerated from 0.6% last November to 7.2% in February, 10.0% in March and 14.3% last month.

Canada also reported a current account surplus of C$ 1.184 billion in 1Q 2021, marking the first swing into surplus since the summer of 2008.

Foreign exchange market action other that the aforementioned rebound in the Turkish lira has been muted today by the U.S. Memorial Day holiday. The dollar is unchanged from Friday’s closing levels against the loonie, Swiss franc, Mexican peso, Chinese yuan and pound sterling. The dollar has softened 0.2% against the yen and 0.1% versus the euro.

Stock markets fell 1.0% in Japan, 0.5% in Singapore, and 0.3% in Australia but rose 1.1% in New Zealand, 1.7% in Indonesia and 0.4% in China. Share prices are down slightly in Germany, France and Italy.

Ten-year sovereign debt yields are up two basis points in France and Germany. Among commodities, the prices of WTI oil and gold are respectively 1.6% and 0.1% higher.

On-year money and credit growth in the euro area each slowed in April to 9.2% and 7.7%, respectively, from 12.3% and 9.8% in February.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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