Much Data to Peruse on a Snowy Friday

January 28, 2022

But first, a quick rundown of overnight market movement.

  • The DXY weighted dollar index touched an 18-month high of 97.44 but is steady on balance. There’s been no net movement against the euro, Swissie or peso, dips of 0.2% against the yuan and Turkish lira, and upticks of 0.6% against the Aussie dollar, 0.3% relative to the yen and 0.1% against the loonie.
  • Stock markets rose 2.1% in Japan and 1.9% in South Koreabut fell 1.1% in Hong Kong and 1.0% in China. In Europe, the British, German, French, Italian and Spanish stock markets are down 1.4 – 2.1%.
  • Ten-year sovereign debt yields are five basis points higher in France and Italy, four basis points higher in Germany, the U.K., Spain and the Netherlands, up two basis points in the U.S. and a basis point higher in Japan.
  • Prices for oil and gold respectively have risen 1.9% and fallen 0.5%.

Declines last month in U.S. nominal and real personal consumption of 0.6% and 1.0% were roughly as expected and broke a six-month streak of nominal increases. The PCE price deflator rose 0.4% on month and posted an on-year increase of more than 5.0% (5.8% to be exact) for a third consecutive month. The savings rate jumped 0.7 percentage points to a 3-month  high of 7.9%. Separately, the U.S. quarterly employment cost index was a little less frothy in 4Q than 3Q, with quarterly and year-on-year advances of 1.0% and 4.0%. In the 12 months to 4Q 2020, by comparison, the ECI climbed 2.5%.

Economic sentiment in the euro area weakened 1.1 points to a 9-month low of 112.7 in January. A record high had been experienced last July when the index printed at 117.6. Consumer confidence and service sector sentiment were at 10- and 9-month lows. Industrial sector sentiment slipped to a 5-month low, and construction and the labor market were at 4-month lows.

French GDP growth slowed sharply last quarter to a 0.7% rise from the prior quarter. But year-on-year growth climbed to 5.4%, and the 2021 average growth rate of 7.0% was the highest since 1969.

Real GDP in Hong Kong edged only 0.1% higher last quarter, trimming the year-on-year pace to 4.8%, lowest in a sequence of four straight on-year advances. GDP rose 6.4% on average in 2021.

Spanish real GDP growth last quarter of 2.0% exceeded expectations and lifted the on-year pace to a two-quarter high of 5.2%.

German GDP data were very disappointing. A quarterly contraction of 0.7% was more than twice what analysts were projecting and resulted in a significant deceleration of the rise from a year earlier to 1.4%. Growth in 2021 averaged 2.8%. There have been five quarterly GDP declines in the past nine quarters.

Belgian GDP rose 0.5% last quarter, down from 1.2% in 1Q, 1.7% in 2Q and 2.0% in the third quarter of 2021. On-year Belgian growth of 5.6% was down from 15.1% in 2Q 2021 but much improved from -4.4% in 4Q 2020.

Among reported price data today, total Tokyo consumer prices in January rose only 0.2% on month and 0.5% on year, which was 0.3 percentage points less than in December.

Australian producer price inflation jumped to a 51-quarter high of 3.7% in 4Q 2021.

German import prices had leaped 3.8% in October and 3.0% on month in November but went up by a much less-than-forecast 0.1% last month. The 12-month rate of import price increase settled back from 24.7% in November (the most since October 1974) to 24.0%.

Italian PPI inflation of 22.6% in December was at a record high and a huge turnaround from -0.3% in January. Producer price inflation averaged 10.7% through the whole calendar year.

French producer prices in November had jumped 3.9% on month and 17.9% on year — both records. There was some slight improvement in December, with a monthly rose of 1.0% and a 12-month increase of 17.7%.

Record high Greek producer price inflation of 29.4% last month was up from 24.6% in November and 0.0% last February.

Austrian PPI inflation of 16.7% was the most this century. But in Singapore, PPI inflation settled back to a 3-month low in December, albeit at a still unacceptably high 22%.

Icelandic CPI inflation of 5.7% in January was the most in 117 months, while PPI inflation as of December (17.3%) was 3.7 percentage points less than in November.

The Taiwanese manufacturing purchasing managers index fell from a 4-month high of 55.5 at end-2021 to a 2-month low of 55.1 in January. Vietnam’s manufacturing PMI rose 1.2 index points to 53.7 this month, best in 9 months.

Between December 2020 and last month, industrial production in South Korea grew 6.2%, a 2-month low, while retail sales went up 6.5%, a 2-month high. Construction rose on year for the first time in 15 months.

Swedish retail sales last month tumbled 4.4%, resulting in the smallest 12-month rise (3.3%) in 11 months. In Norway, retail sales also dropped sharply (3.1%) in December and were 2.3% below the end-2020 level.

Overall Italian economic sentiment dropped to a 9-month low in January when consumer confidence and manufacturing sector confidence hit 8- and 4-month lows.

In January, Portuguese consumer confidence and business confidence printed at a 3-month high and a 2-month low, respectively. In Belgium and Austria, consumer sentiment ticked up to a 2-month high, but business confidence worsened to a 10-month low. In Greece, business sentiment reached a 20-year peak, and consumer confidence, while still depressed, was less so than in December. In Sweden, consumer confidence and business sentiment fell to 14- and 10-month lows. Danish business confidence was at an 11-month low. Finnish business sentiment fell to a 6-month low.

Brazilian unemployment, which was as high as 14.7% last April, dropped half of percentage point to a 21-month low of 11.6% in November.

The final U. Michigan/Reuters index of U.S. consumer sentiment in January was revised downward by 1.6 points to 67.7, the lowest reading since 2011.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.




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