Another Weak Round of Chinese Price Data
July 10, 2023
Sharp moves last Friday in equities (down) and the dollar (up) have been only marginally reversed this morning. Share prices in the Pacific Rim closed up 0.6% in Hong Kong and 0.2% in China and Indonesia but dropped 0.6% in Japan and 0.5% in Australia. The German, French and Italian stock exchanges are up 0.6% so far.
The dollar has risen 0.7% versus the Australian dollar and 0.5% vis-a-vis sterling but just 0.1% against the euro, yen and Canadian dollar. The DXY weighted dollar index also is only 0.1% firmer.
Oil’s price was well bid last week but has slid 0.7% today. Gold has dipped 0.1%.
The ten-year Japanese JGB yield climbed three additional basis points and is just 5 bps below the Bank of Japan’s 0.5% cap. Such has climbed from a tad less than 0.25% in mid-March amid speculation that central bank officials will tweak their policy and with inflation being above 2.0% for the past 14 reported months.
The 10-year U.S. Treasury bond and British gilt yields, by contrast, are 1 and 2 basis points softer today, and their German counterpart is steady.
Chinese consumer prices recorded a fifth consecutive monthly decline in June, depressing on-year CPI inflation to a 28-month low of zero percent. A concurrent 5.4% drop in producer prices was the greatest 12-month decline in 90 months.
U.S. Treasury Secretary Yellen’s trip to China produced no notable deals of a substantive nature, but each side indicated willingness to keep diplomatic channels open. The biggest headline to emerge from Yellen was an acknowledgement that a U.S. recession is possible.
Japan’s economy watchers index, a gauge of the sentiment of service sector workers, fell back 1.4 points to a 3-month low in June. Japan’s current account surplus narrowed slightly in seasonally adjusted terms to 1.7 trillion yen in May, but merchandise exports were weaker than forecast.
Among other price data reports today,
- CPI inflation in Egypt accelerated to a 65-year high of 35.7% in June from 32.7% in May and 13.2% in June 2022.
- Norwegian producer price inflation has collapsed from 77.3% last August to a record sub-zero -28.5% last month.
- Norwegian consumer price inflation returned to April’s 6.4% in June after rising to 6.7% in May. That’s still not far from last October’s peak of 7.5%.
- Danish CPI inflation, which also peaked last October at a 479-month high of 10.1%, fell to a 21-month low of 2.5% last month.
Chinese motor vehicle sales were merely 0.1% higher than a year earlier in June, a much slower pace of recovery than that of 8.8% recorded in the first half of 2023 as a whole.
Indonesian consumer confidence weakened 0.9% in June from May’s one-year high.
Ireland’s construction purchasing managers index printed above the 50 neutrality level but just barely at 50.4. That was the highest score since 50.2 last September.
Retail sales in the Czech Republic posted their smallest on-year drop (6.1% in May) in the last nine months.
Greek industrial production fell 0.6% on month but rose 1.4% on year in May.
Several Federal Reserve district presidents are slated to speak publicly today.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese CPI and PPI, Japanese current account, U.S. Treasury Secretary Yellen