Several Countries Releasing Price Data Today
January 12, 2022
The following price data were reported before the highly awaited U.S. CPI report:
- Chinese consumer price inflation slowed more than predicted in December, dropping 0.8 percentage points from a 15-month high of 2.3% in November to a 2-month low of 1.5%. Average CPI inflation in 2021 of 0.9% was only a third of the government’s target and down from 2.5% in 2020.
- Chinese producer price inflation also decelerated, sliding 2.6 percentage points to a 4-month low in December of 10.3%.
- German wholesale prices rose 0.2% in December, the smallest monthly increase in 13 months, and that slowed their 12-month rate of increase to a 2-month low of 16.1%. This was the first deceleration in ten months.
- Czech CPI inflation of 6.0% in December represents a 159-month high and compares with 2.2% in the first month of last year.
- Serbian CPI inflation accelerated 0.4 percentage points to a 101-month high of 7.9% in December.
- Portuguese CPI inflation in December was revised down 0.1 percentage point to 2.7%, which still represents a 110-month high.
- Belgian producer price inflation of 31.4% in November constitutes another record high and represents a swing from -2.1% at end-2020.
- In India, consumer prices fell 0.4% in December, their first monthly downtick in 11 months, but the year-on-year advance increased to a 5-month high of 5.6%, one and a half percentage points above the pace last January.
Equity markets in Asia and Europe overnight got a boost from the advance of U.S. share prices following yesterday’s reconfirmation testimony by Fed Chairman Powell. Japan’s Nikkei rose 1.9%, and Hong Kong’s Hang Seng index closed up 2.8%. The British Ftse and Paris Cac are 0.6% and 0.4% firmer. U.S. stock futures are flat to marginally firmer.
While not backing away from pledging to do what it takes to preserve medium-term price stability, Powell opined that that goal could probably be secured without damaging the post-pandemic recovery. Such assurance has often been given at times when monetary policy had to be tightened, but history shows that more times than not efforts to reduced an inflation rate that has become unacceptably high have discernibly slowed economic growth and often led to recessions and near-stalls.
The dollar just prior to the U.S. CPI release was unchanged on a weighted basis, essentially maintaining the losses sustained yesterday. The dollar overnight had lost 0.3% against the loonie and 0.1% versus the Swiss franc and sterling but was unchanged against the euro and 0.1% stronger relative to the yen.
The ten-year U.S. Treasury yield had rebounded a basis point, but its German, British, and Japanese counterparts had each dropped by two basis points.
The price of WTI oil had risen 0.5% additionally to more than $81.50 per barrel, and gold was holding steadily above $1,805 per ounce.
The magnitude of the rebound in Euroland industrial production during November far exceeded expectations. After sliding 1.7% in August, 0.9% in September and 1.3% in October, output climbed 2.3% but still recorded a 1.5% year-on-year decline in November. That’s the biggest 12-month rate of drop in 13 months. After dipping 0.2% in 2 2021 and 0.8% on average in the first quarter, the average of industrial production in October-November was 1.3% below the 3Q level. Both Germany and France suffered monthly declines of industrial production in November, contrary to the rise in the euro area as a whole.
At least U.S. December consumer price increases did not surpass expectations as they had done in most months last year, but such didn’t fall below the market consensus either. The CPI rose 0.5% on month, down from back-to-back gains of 0.9% in October and 0.8% in November. On-year total CPI inflation of 7.0% was the most since mid-1982, and core inflation (5.5%) that excludes food and energy rose to its highest point since February 1991 at the time of the Gulf War. On the bright side, energy prices fell 0.4%, their first monthly decline in 20 months, and that reduced the 12-month increase by 4.5 percentage points to a still steep 29.3%.
Japan’s current account surplus on a seasonally adjusted basis widened 33% from the prior month to 1.37 trillion yen, but the unadjusted surplus was just JPY 987 billion, roughly half the size of the November 2020 surplus. Japanese officials also reported a 0.7% on-year rise in bank lending last quarter, same as in 3Q 2021, and a 0.1 point uptick in the Economy Watchers index to a 16-year high in December.
Chinese M2 money growth accelerated 0.5 percentage points to a 9-month high of 9.0% in December. New yuan bank lending was at CNY 1.13 trillion last month fell more sharply than expected beneath CNY 1.27 trillion in November, but the annual 2020 and 2021 loan totals were similar.
Romanian GDP growth slowed to 0.4% in 3Q 2021, a fourth of the pace in 2Q, and on-year growth fell to 7.4% from 13.9% in 2Q.
In India, industrial production contracted for the third time in four months during November, dropping 4.7% below October’s level and resulting in the smallest on-year advance (1.4%) in a streak of nine consecutive positive 12-month rates of change.
Regarding daily U.S. Covid-19 data, there was good and bad news. The super-spike to 1.417 million cases on January 10th was followed by 767.5 thousand yesterday. However, the death rate is moving higher with 7-day average tallies of 1,559 on Sunday, 1,653 on Monday and 1,736 yesterday, which was 40% greater than two weeks prior. Hospitalizations are on the rise, showing an 84% national advance over the past two weeks to 140.6k.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: China CPI and PPI, Euroland industrial production, Japanese current account, U.S. CPI