All Quiet on Christmas Eve 2021
December 24, 2021
With Christmas falling on a Saturday, most countries are observing a holiday closure this Friday. The biggest news story continues to be the Omicron strain of Covid-19, which has lifted the 7-day U.S. average case total slightly past 186k and the single day case numbers on December 23rd to around 265,000 in the United States and about 971,000 globally. The silver lining in this highly infectious new variant has been that it so far has resulted in fewer severe illnesses than Delta did. While recent economic data have proven resilient, the fallout in economic activity can be observed in a number of confidence measures and cancellation of thousand of flights around the world.
One notable country not observing a holiday today is Japan, where November consumer prices, housing starts and construction orders were reported.
- Consumer prices rose 0.3%, reversing October’s monthly drop of 0.3% and resulting in a 22-month high 12-month rate of increase of 0.5%. Core inflation, which by Japan’s customary definition excludes perishable food but not energy, also punched in at 0.5%, a 21-month high. But consumer price inflation, excluding both perishable food and energy, printed at negative 0.8%, its largest 12-month decline in four months.
- A 3.7% on-year rise in housing starts last month was the smallest increase in eight months.
- And construction orders, which had posted advances of 27.3% in September and 2.1% in October, were unchanged from their November 2020 level.
The dollar overnight edged 0.1% lower against the yen. In the absence of many other financial markets, the Nikkei-225 equity index in Japan dipped merely 0.1% as well, and the 10-year Japanese JGB yield of 0.06% did not move on balance.
Against other major currencies the dollar has been very steady on Friday, ticking up 0.1% against the euro, sterling, yuan and Swiss franc and holding steady versus the Canadian dollar. Two more active dollar pairs have been the Mexican peso and Turkish lira. The dollar fell 0.6% against its southern neighbor and recovered 3.0% relative to the Turkish lira that had staged a policy-assisted sharp recovery earlier this week.
Just a couple of other data releases occurred this quiet Friday. Dutch GDP growth last quarter was revised slightly higher to now show a 2.1% quarterly advance and a gain of 5.2% from a year earlier. Dutch growth in 3Q was concentrated in personal consumption and government spending, while both business investment and net foreign demand exerted drags on the economy. The Dutch current account surplus narrowed to a 3-quarter low of EUR 19.1 billion but remained wider than its year-earlier size of EUR 14.2 billion.
Factory output in Singapore climbed 2.3% in November, defying forecasts of a fractional dip and resulting in a double-digit on-year increase (14.6%) for a second straight month.
Economic activity in Mexico slipped 0.2% on month and 0.7% on year in October. Those results were weaker than anticipated and accompanied by news of Mexico’s fifth monthly trade deficit in a row. But the shortfall of $111 million was the smallest deficit in that streak.
Chilean producer price inflation surpassed 30% for the second month in row during November and exceeded 20% for a ninth straight time.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without expressed permission.
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