Heavy Day for Released Data

August 31, 2021

Typical of the final business day of the month, August 31, 2021 has experienced a bunch of reported data around the world.

In financial markets, the dollar has slipped back 0.2% against its DXY weighted index but is up 0.5% compared to a month ago. Overnight moves in the dollar include drops of 0.2% versus sterling, the euro, kiwi and yuan, 0.3% against the Aussie dollar, and 0.1% relative to the Japanese yen. Most stock markets in Asia advanced Tuesday, but those in Europe have fallen. Ten-year U.S. Treasury, German bund and British gilt yields rose 1, 4, and 10 basis points overnight, and the price of West Texas Intermediate oil had dropped 0.8%.

Consumer price inflation in the euro area surpassed market expectations in August, with gains of 0.4% from July and further acceleration in the 12-month increase to a 117-month high of 3.0%. On-year inflation rose between August 2020 and August 2021 from -0.1% to +3.4% in Germany, from +0.2% tp +2.4% in France, from -0.5% to 2.6% in Italy, from -0.6% to 3.3% in Spain and from -2.3% to +1.3% in Greece.

On-year house price inflation in the United States accelerated in June to 19.0% according to the Case-Shiller index of 20 metro areas and to 18.8% according to the FHFA monthly index. The Chicago regional manufacturing purchasing managers index relapsed sharply to a 2-month low of 66.8, giving back most of July’s gain to 73.4, and the survey also highlighted the steepest input price inflation in over four decades. And similarly to the  previously released U. Michigan consumer sentiment index for August, the Conference Board’s U.S. consumer confidence index for that month tumbled to 113.8 from a reading of 125.1 in July, surprising analysts who had been anticipating only modest deterioration.

NBS government-authorized Chinese purchasing  manager indices dropped to 18-month lows in August of 50.1 in the case of manufacturing and 47.5 for services.

Italian GDP climbed 2.7% on quarter and 17.3% on year in 2Q 2021.

French GDP rose 1.1% on quarter and 18.7% compared to the second quarter of 2020. Even so, GDP was smaller than before the onset of the pandemic.

Finnish GDP increased 2.1% on quarter and 7.5% on year after back-to-back 1.5% declines on year in the previous two quarters.

Portuguese GDP rebounded 4.9% after the first quarter’s 3.2% plunge, and that lifted on-year growth to 15.5%.

Polish GDP advanced 2.1% on quarter and 11.1% on year, while Czech GDP grew 1.0% on quarter and 8.2% compared to the level in 2Q 2020.

Similarly, Icelandic GDP, which had dropped 3.3% in 1Q, then rose 4.2% on quarter in 2Q, resulting in the greatest year-on-year growth (7.3%) in 18 quarters.

On-year GDP  growth in India revived to 20.1% in the second quarter from 1.6% in the first quarter.

Danish GDP rose 2.3% on quarter and 8.5% versus the pandemic-depressed second quarter of 2020.

Canadian GDP, unlike the aforementioned economies, contracted last quarter by 0.3% (or 1.1% when expressed at an annualized rate). Although GDP closed out the quarter on a rising note in June, early indications suggest that GDP in July fell as Covid resurged.

A bunch of Japanese indicators were reported. Industrial production dropped 1.5% in July but exceeded the July 2020 level by 11.6%. Housing starts were 9.9% greater than a year earlier, but construction orders recorded a 3.4% 12-month decrease. Consumer confidence in August slid 0.8 index points to a 3-month low  of 36.7, but the July jobless rate improved to a 3-month low of 2.8%.

The number of unemployed German workers fell by 53k this month, and the jobless rate dipped in July to a 10-month low of 3.6%.

South Korean industrial production rose 0.4% on  month and 7.9% on year in July, but retail sales there posted a 0.6% monthly decline. Also, construction output was 8.1% lower than a year earlier.

Retail sales in Hong Kong were only 0.9% above their year-earlier level in July, the smallest 12-month increase in a steak of six straight on-year advances.

Dutch retail sales fell 2.5% in June and by a further 1.7% in July, trimming their 12-month increase to 3.4% from a recent crest of 9.6% in April.

Turning to today’s price data, Italian consumer prices rose 0.5% for a second straight month in August, which lifted the on-year measure to a 21-month high of 2.1%. Italian producer price inflation of 10.6% in July after 9.1% in June was the most since at least 1990.

French CPI inflation accelerated 0.7 percentage points to a 33-month high of 1.9% in August, and PPI inflation jumped 1.1 percentage points in July to a record high of 8.6%.

Belgian PPI inflation accelerated to 18.9% in July from 17.0% in June, 12.0% in April and 0.3% back in January.

Polish CPI inflation of 5.4% in August was the most since mid-2001 and up 3 percentage points since February.

Covid data remain an unsettling and sinister background factor. Global deaths to date now exceed 4.5 million, and the U.S. total yesterday of around 1,350 was almost double its 12-week average. The number of new U.S. infections yesterday surpassed 155k.

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

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