End of Third Quarter 2021
September 30, 2021
The DXY weighted dollar dipped 0.1% overnight but experienced a quarterly advance of around 2.5%.
In the Pacific Rim, share prices on the final trading day of the quarter rose 1.9% in Australia, 1.4% in New Zealand, 2.0% in Indonesia, and 0.9% in China but fell by 0.4% in Hong Kong and 0.3% in Japan.
European equity indices are thus far down slightly for the most part, while U.S. futures suggest a 0.4% rebound at the open.
The ten-year British gilt yield (+3 basis points) rose more sharply overnight than its U.S. or German counterparts, each of which increased by a single basis point. The 10-year JGB yield dipped 1 bp.
The price of gold rose overnight but fell 2.5% from its midyear level. WTI oil dipped 0.6% so far today.
There were more new U.S. jobless claims last week (362k) than forecast, and that was the third straight weekly acceleration in a row since just 312k new claims were filed in the week of September 4th.
Second quarter U.S. real GDP grew at an annualized 6.7% pace on quarter on quarter, representing a 0.1 percentage point upward revision from the previous estimate. On-year growth of 12.2% was not revised. Comparing 2Q 2021 to the same quarter a year earlier, the personal consumption price deflator and core PCE deflator recorded increases of 3.9% and 2.4% anfter gains of 1.8% and 1.7% in the first quarter.
Released Japanese economic data today was highlighted by drops of 0.3% on month and 3.9% on year in August industrial production, which compelled officials to revise their trend characterization from “picking up” to “pausing.” Other data revealed a disappointing drop in August retail sales of 4.1% on month and 3.2% on year, a smaller-than-expected 7.5% on-year rise in housing starts, and a 12-month decrease in construction orders of 2.0%.
Three Chinese purchasing managers surveys for September were reported. The NBS government-authorized manufacturing PMI (49.6) fell 0.5 points and below the 50 breakeven level for the first time since February 2020, but the NBS non-manufacturing PMI rebounded from an 18-month low in August of 47.5 to a 2-month high of 53.2. Finally, the Caixin privately produced manufacturing PMI of 50.0 conveyed nether improvement nor further deterioration.
Compared to a year earlier, South Korean industrial production in August was 9.6% higher after a 7.7% gain in July, but retail sales went up 3.8%, down from 7.9% on-year growth in the prior month. Business sentiment in South Korea fell five index points to a 6-month low in September.
Euroland’s unemployment rate of 7.5% in August was 0.1 percentage point lower than in July as analysts were expecting and 1.1 percentage points less than in August 2020.
German consumer prices were unchanged on month in September, matching August’s movement, but 4.1% above their year earlier level, which represents an acceleration from 2.3% in June, 1.7% in March and -0.3% last December. Germany’s labor market remains resilient despite the Delta variant, ans the number of unemployed works contracted another 30K in September.
French CPI inflation, like German inflation, climbed 0.2 percentage points this month to 2.1%. PPI inflation in August of 10.0% represents a record high.
Italian CPI inflation of 2.6% in September was up from 2.0% in August and the most in 107 months.
Austrian PPI inflation accelerated 0.9 percentage points to 9.5% in August, the most in over a decade.
Danish quarterly GDP growth in the second quarter was revised upward from 2.3% to 2.8% and associated with on-year growth of 9.8% versus -6.7% between the second quarters of 2019 and 2020.
Stronger business investment than assumed previously resulted in a 0.7 percentage point upward revision of British quarterly GDP growth to 5.5% in 2Q 2021. On-year growth is now estimated at 23.6% yet the level of GDP remained somewhat lower than its end-2019 level. Other U.K. data reported today were a considerably smaller second-quarter current account deficit of GBP 8.61 billion (equal to 1.5% of GDP) and a deceleration of the on-year Nationwide house price index to a rise of 10.0%.
The Swiss KOF index of leading economic indicators fell further in September to a reading of 110.6 from 113.5 in August and 143.6 in May.
Dutch retail sales recovered 0.9% in August after back-to-back declines of more than 2.0% in June and July. Sales were only 3% above their year-earlier level.
South African PPI inflation edged up 0.1 percentage point in August to a 2-month high of 7.2%.
Hong Kong retail sales posted their largest on-year advance (10.6%) in August since April.
Spanish retail sales fell 0.2% in August to post their biggest on-year drop (0.9%) in a half year.
Producer prices in Malaysia and Greece in August were 11.3% and 13.1% above year-earlier levels.
The Turkish trade deficit of $29.8 billion in January-August was a bit smaller than that of $33.0 billion a year earlier.
The Czech National Bank two-week repo rate was hiked by 75 basis points to 1.50%. Instead of implementing a third 25-bp increase since June, this surprisingly large tightening reverses all but 50 basis points of last year’s net reduction of the policy interest rate. In early February of 2020, the rate had been raised from 2.0% to 2.25%, but as Covid surfaced, officials quickly reversed gears lowering such by 50 bps in mid-March, 75 bps in late March and another 75 bps in early May. Czech CPI inflation this year has doubled from a low of 2.1% in February to 4.1% by August, which exceeds the target range ceiling by a bit more than a percentage point.
Monetary policies are also being reviewed today in Colombia and Mexico.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British GDP and current account, Czech National Bank, Euroland unemployment, Japanese industrial production and retail sales, U.S. GDP