Reviewing The Economic Reports For January 23, 2015

Many economic reports came out today. Some painted good pictures and some painted bad pictures for their respective economies.

Euro Zone

The economic activities in the two major economies, Germany and France, are not improving tremendously. The EZ’s Flash Manufacturing and Services PMI came in line at 51.0 and 52.3 respectively. Belgian NBB Business Climate was -8.8 below the forecast of -6.1. It is a survey of 6000 businesses and a reading above 0.0 indicates improving conditions, and below 0.0 worsening conditions.

The French Flash Manufacturing PMI came at 49.5, better than the forecast of 48.1 and last month’s reading of 47.5. It improved but still shows contraction, as it is below 50. After the steep decline in 2011 and 2012, it has not recovered. French Flash Manufacturing PMI - 01-23-2015
The French Services PMI, at 49.5, was lower than the expectations of 50.9 and last month’s 50.6. So was the Markit Composite PMI at 49.5 versus 50.1 forecast.  French Flash Services PMI - 01-23-2015
The German PMI’s didn’t do any better. The Manufacturing PMI disappointed at 51.0 versus 51.8, though it shows expansion. German Flash Manufacturing PMI - 01-23-2015
The German Flash Services PMI came inline at 52.3. The German services sector is doing better than the manufacturing. German Composite PMI was 52.2 versus forecast of 51.8. German Flasg Services PMI - 02-23-2015

United Kingdom

The general thrust of the economic reports was favorable for the British economy and pound sterling. The Retail Sales m/m for December came at +0.4%, which was better than the forecast of -0.6%. The Core Retail Sales – excluding the volatile Auto and Fuel sales – came at +0.2%, also better than the forecast of -0.7%. The Year-over-Year Retail Sales as +4.3% and Core Retail Sales was +4.2% the forecast were +3.0% and +3.3% respectively. Graphs, on the other hand, do not show a roaring Retail Sales environment.

UK Retail Sales M/M 01-23-2015 UK Core Retail Sales M/M - 01-23-2015
UK Retail Sales Y/Y - 02-23-2015 UK Core Retail Sales Y/Y 01-23-2015

Canada

The Bank of Canada unexpectedly cut the interest rate on January 21st, 2015. Today’s CPI report give us some of the reasons behind it. The CPI m/m for December was -0.7%, below the forecast of -0.5%. The  Core CPI – excluding the eight most volatile items – came in line at -0.3%. The news from the retail sector was somewhat better. The Retail Sales was +0.4% versus the forecast of +0.1% and 0.0% last month. The Core Retail Sales m/m -excluding automobiles – came at +0.7% versus the expectations of +0.5% and last month’s 0.1%.

Canadian CPI m/m - 01-23-2015 Canadian Core CPI m/m - 01-23-2015
Canadian_Sales_mm_150123 Canadian_CoreSales_mm_150123

United States

On the States side, the Flash Manufacturing PMI disappointed at 53.7 when the market was expecting 54.1. The Existing Home Sales also disappointed. The Annualized numbers of residential homes sold last month was 5.04 million, below the forecast of 5.087 mil. Finally the Conference Board’s Leading Index m/m came in line at 0.5%

 U.S. Flash Manufacturing PMI - 01-23-2015  U.S. Existing Home Sales - 01-23-2015

Around The Net: Noted For Your Morning Ruminations for January 23, 2015

Noted for you morning ruminations or procrastination

  1. Why The China Pessimists Will Be Proved Wrong
    Sustainable quality growth is the watchword for 2015. There is a near consensus that China’s economic growth will cool further in 2015. Some analysts are predicting a growth target of about 7.3% this year, but many think the official growth target is more likely to be pegged around an achievable target of 7%. The International Monetary Fund has predicted a growth rate of 6.8%.
  2. Mario Draghi’s Bombshell Is Europe’s Last, Best Hope to Return to Growth
    It may also be the last, best hope to prevent Western Europe from sliding toward another lost economic decade, with the high unemployment and geopolitical strains that would imply.
  3. Family Dollar Shareholders Approve $8.5 Billion Deal With Dollar Tree
    Prominent shareholder advisory firms, including Institutional Shareholder Services, ultimately urged investors in Family Dollar to support the lower takeover bid, arguing that the certainty of closing the Dollar Tree deal outweighed the higher price of the other bid.
  4. Fed Watch: Policy Divergence
    Late last week, Reuters reported that the Fed’s resolve was stiffening. This week, the Wall Street Journal reported the Fed was staying the course. This morning, Bloomberg says the Fed is getting weak in the knees
  5. Why ‘Emotional Intelligence’ Is The Most Important Personality Trait You Can Have
    For leaders, self-awareness is crucial to developing emotional intelligence and preventing derailment. Simply knowing our own values, attitudes, beliefs and motivators goes some way to helping us to understand our own behaviour and, in particular, how we respond when these values feel compromised.
  6. Insiders, Outsiders, and U.S. Monetary Policy
    Well, even smart, flexible people can fall prey to incestuous amplification. And I worry that this is what is happening to the insiders. On the whole, it seems less likely for the outsiders, although it’s true that the Keynesian econoblogs form what amounts to a tight ongoing discussion group that could be doing some amplification of its own
  7. Larry Summers warns of epochal deflationary crisis if Fed tightens too soon
    “Deflation and secular stagnation are the threats of our time. The risks are enormously asymmetric,” said Larry Summers, the former US Treasury Secretary. “There is no confident basis for tightening. The Fed should not be fighting against inflation until it sees the whites of its eyes.”
  8. Considerable capital flow, volatile Rupee to keep RBI Governor Raghuram Rajan on edge
    India received a record $40.32 billion from international institutional investors in both debt and equity in 2014. This year, the inflows have been $2.2 billion so far in debt and equity. It is this flow based on optimism about India that’s led to the rupee gain almost 2 per cent in relation to the US dollar.
  9. End of a Trend? Finding Reason for Optimism Overseas
  10. Oil Climbs as Saudi King’s Death Spurs Policy Speculation
    “The passing of King Abdullah is going to increase uncertainty and increase volatility in oil prices in the near term,”
  11. Oil Drillers ‘Going to Die’ in 2Q on Crude Price Swoon
    Oil drillers will begin collapsing under the weight of lower crude prices during the second quarter and energy explorers who employ them will shortly follow, according to Conway Mackenzie Inc., the largest U.S. restructuring firm.
  12. How Much Deflation Is Enough? Time To Put More Into Commodities