Lack Of Impetus Keeps EUR, JPY, & USD Range Bound

A series of low impact data was reported from the Europe, US and Japan yesterday. As detailed below, the German industrial production and trade balance data was impressive. However, it was offset by a poor French trade balance data. The economic data from Japan and the US were mixed. The lack of a major impetus keeps most of the Forex pairs range bound.

The Labor Ministry of Japan reported a 0.1% y-o-y increase in inflation-adjusted average wages in November. It is the first rise seen in 11 months. Average total cash earnings per worker, including overtime pay and basic salary, grew 0.9% from the prior year to ¥278,173 (about $2,500). The Ministry of Health, Labor and Welfare indicated that it is the fourth consecutive monthly increase.

The Cabinet Office of Japan, however, presented a disappointing consumer confidence report. According to the statistics agency, the consumer confidence declined to 44.7 in December, from the 50-month high of 44.9 in November. Analysts had expected the consumer confidence to increase to 45.1.

Later yesterday, Germany’s Destatis reported a 3.4% m-o-m increase in industrial production in November. In October the industrial production had declined by 1.2% from September. The reported figures were almost double the economists estimates of 1.9%.

The German Federal Statistical Office (Destatis) also reported a strong increase in trade balance to €22.3 billion in November, from €19.9 billion in the earlier month. Analysts had expected a trade balance of €20.7 billion.
However, the positive sentiment created by German economic data was nullified by the negative economic data from France. The Ministry for the Economy and Finance reported a trade deficit that widened to €5.7 billion in November, from €5.3 billion in the earlier month. Economists had expected a trade deficit of €4.8 billion.

In the US, the National Federation of Independent Business Index declined sharply to 104.9 in December, from 107.5 in the previous month. The reading also missed analysts’ estimates of 108.40. Still, it is one of the strongest readings in the 45-year history of the NFIB surveys. The highest reading of 108 was recorded in July 1983.

Later yesterday, the Bureau of Labor Statistics reported a decline in the job openings to 5.88 million in November, from 5.93 million in the previous year. Analysts had expected job openings of 6.05 million. Lower than anticipated JOLTS job openings may weaken the greenback further.

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