One Last Bout of Risk Aversion in 2022
December 30, 2022
On this final trading day of the year, European share prices show losses of 1.1% in Germany and around 0.75% in France, Italy and Spain. U.S. stock futures point to comparable losses. The Japanese Nikkei closed unchanged. The Shanghai composite and India’s Sensex respectively rose 0.5% and fell 0.5%.
Ten-year sovereign debt yields are up 7 basis points in Germany, 5 bps in the United States and a basis point in Great Britain but down four bps in Japan where the Bank of Japan purchased a record daily sum of JGBs.
The dollar fell 0.9% against the Chinese yuan and 0.8% versus the Japanese yen. That’s been balanced by rises of 0.4% against the peso, 0.4% relative to sterling, 0.2% against the Swiss franc and 0.1% versus the euro and kiwi. The Canadian dollar is steady.
Bitcoin is 65% below its year-earlier level. Oil and gold prices are down 0.4% and 0.1% today.
More data have been reported than earlier this week, but they are second-tier indicators from a market-moving standpoint.
Spanish CPI inflation slowed to a 13-month low of 5.8% in December, a full percentage point less than in November and down from a 37-year high of 10.8% last July. Spain’s current account surplus of EUR 2.7 billion in October was the largest in five months.
British house price inflation, according to the Nationwide monthly index, dropped to 2.8% in December from 4.4% in November and 220-month high of 14.3% last March.
South Korean CPI inflation of 5.0% in December matched November’s 7-month low of 5.0% and down from a 284-month high of 6.3% in July 2022.
Portuguese CPI inflation of 9.6% this month constitutes a 3-month low.
Sri Lankan consumer price inflation of 57.2% in December was the smallest 12-month rate of increase in half a year and down from a record peak of 67.8% in September.
Greek producer price inflation dropped from 35.4% in October to 26.2%, a one-year low, in December. The energy component sank 9.5% on month and fell to a 40.4% on-year pace from 57.6% in the prior month.
Austrian producer price inflation posted a monthly decrease for the first time in over two years and 15.4% year-on-year increase versus the record 22.1% two months earlier.
China’s current account surplus in the third quarter was revised marginally higher to $144.3 billion, which represents the biggest quarterly surplus ever and compares to $82.6 billion in 3Q 2021.
Turkey’s trade deficit ballooned from $39.4 billion in the first 11 months of 2021 to $99.8 billion in January-November of 2022.
Russian’s composite and service sector purchasing manager indices printed at respective 6- and 2-month lows of 48.0 and 45.9 in December.
Chilean, Greek and Portuguese retail sales posted year-on-year declines of 15.2%, 2.2% and 1.2%, while Dutch retail sales recorded a 5.5% increase between November 2021 and last month.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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