A Lot of Data Out Today for Investors to Digest – Currency Thoughts
A Lot of Data Out Today for Investors to Digest
August 30, 2024
There’s been a typical end-of-month deluge of economic data releases but without significant financial market repercussions.
The dollar rose 0.2% overnight against the Japanese yen and Swiss franc but shows no net change against the euro, sterling or Aussie and New Zealand dollars.
Following Thursday’s record high close in the DOW, pre-market trading today has seen the Nasdaq and SPX futures rise about 0.5% and a further marginal uptick of the DJIA. Asian stock markets this Friday closed up 1.1% in Hong and Singapore and 0.7% higher in Japan and China. European share prices are up as well.
The ten-year British gilt yield is four basis points lower, and its German, French, Spanish and Italian counterparts have each dipped by one basis point. The 10-year U.S. Treasury and Japanese JGB yields are steady.
Gold has settled back slightly from its record recent highs, while Bitcoin and WTI oil prices are today 0.4% and 0.2% firmer.
Arguably the most significant data report today, namely the monthly U.S. personal consumption price deflator, is yet to arrive, but there’s much otherwise to ponder.
Unemployment in the euro area unexpectedly dipped 0.1 percentage point to a record low of 6.4% in July. Nonetheless, that’s not far apart from the year-earlier level of 6.6%.
Euroland’s August consumer price figures delivered mixed news. The overall inflation rates dropped 0.4 percentage points to a 37-month low of 2.2%, which is practically aligned with the target and down from 5.2% a year earlier and a peak 10.6% in October 2022. Energy base effects were the main disinflationary force, however, and service sector prices remain sticky, with a higher 12-month increase of 4.2% after August’s 0.4% month-on-month rise. Core inflation thus fell only 0.1 percentage point to 2.8%, a 4-month low.
Among reported Japanese data today,
- A monthly 2.8% increase in industrial production last month reversed only two-thirds of June’s plunge and was smaller than forecast. Officials maintained their trend designation of “fluctuating indecisively.”
- Retail sales rose 0.2% on month and 2.6% on year in July. Like industrial production, these gains fell short of expectations.
- Japan’s jobless rate increased 0.2 percentage points to an 11-month high of 2.7%.
- Housing starts were 0.2% lower in July than a year earlier, but a 62.8% surge in construction orders was the biggest 12-month rise in 64 months.
- August core CPI inflation in Tokyo of 2.4% was up from a recent low of 1.6% in April. If energy as well as fresh food is excluded, however, the 12-month change only edged up 0.1 percentage point to 1.6% in August.
Although at a 20-month high, Britain’s Nationwide house price index in August was only 2.4% above its year-earlier level. Mortgage approvals in the U.K. exceeded expectations and were at a 22-month high in July.
Italian consumer confidence fell back to a 4-month low in August, while manufacturer confidence slid to a 2-month low.
In Germany unemployment printed for a third straight month at a 3-year high of 6.0% versus a low of 5.0% in May 2022, and import price inflation of just 0.9% in July was only about half the expected result due to a 0.4% month-on-month decline.
French GDP growth last quarter was revised 0.1 percentage point lower to a quarterly uptick of 0.2% and an on-year rise of 1.0%. French CPI inflation slowed to a 36-month low of 1.9% in August, while producer prices remained in deflationary territory, posting their eighth straight on-year drop, this time of 5.4%.
In the second quarter, GDP jumped 1.7% from 1Q, substantially trimming the on-year contraction to 0.3% from 3.5% in the prior quarter.
Lithuanian GDP rose 0.7% on quarter and 1.8% on year in 2Q 2024, slightly less than the earlier estimate. Latvian GDP dropped 1.1% on quarter but posted a 0.5% on-year advance, its best showing in 5 quarters. Belgian GDP grew 0.2% (same as an earlier estimate) and was up only 1.1% year-on-year, the least in 13 quarters. Quarterly Finnish GDP of 0.3% was the same as experienced in 1Q and associated with a 1.2% contraction from a year earlier.
Spanish retail sales rose 0.5% on month and 1.0% on year in July, whereas Greek retail sales in June fell by 4.3% on month, cutting their 12-month rise from 10.5% in May to 5.8%.
A 16-month-long streak of Greek sub-zero PPI inflation ended with a 0.1% on-year rise in July. In Sri Lanka, where PPI inflation crested in August 2022 at 103.4%, producer prices were just 2.3% higher than a year earlier in July 2024.
Austrian producer prices stagnated last month and were 1.8% lower than a year earlier. Austrian consumer prices also got reported, showing a 0.2% dip on month and the lowest on-year advance (2.4%) in 40 months.
Portuguese consumer price inflation slowed to an 8-month low of 1.9% in August from 2.5% in July and 10.1% in October 2022. Slovenian CPI inflation of 0.9% in August was at a 41-month low and down from a peak of 11% two years earlier. Polish CPI inflation of 4.3% this month was a tad higher than in July but aligned with analyst expectations. Dutch CPI inflation this month printed at 3.6%.
Investor sentiment in Switzerland rebounded to a 2-month high in August.
The critic reviews of Kamala Harris’ CNN interview last night have been generally positive.
On-year GDP growth in India slowed to a 5-quarter low of 6.7% in 2Q from 7.8% in the first quarter and 8.6% in the final quarter of 2023.
Canadian GDP in June compiled from the supply side was unchanged on month and up only 1.2% on year. Industrial production contracted 0.5% from May’s level and 0.3% compared to June 2023. Quarterly real GDP growth accelerated to 2.1% at an annualized rate from 1.8% in the prior quarter despite a steep slowdown in personal consumption and a drag from net foreign demand.
U.S. inflation measured by the personal consumption price deflator stayed at 2.5%, 0.1 percentage point less than forecast. Similarly, the core PCE deflator did not tick up to 2.7% but instead stayed at 2.6%. Monthly growth in personal consumption was robust at +0.5% but aligned with analyst expectations.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Canadian GDP in June and 2Q, Euroland CPI and unemployment, French GDP and inflation, Japanese retail sales and industrial production, U.S. PCE price deflator
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