Global Macro Perspectives
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The most broad measure of money supply – M2 rose 19.7% YoY in December vs. 19.0% consensus and 19.5% rise in November.
Chinese banks issued CNY 480.8 billion of new loans in December vs. CNY 564.0 billion in November and consensus of CNY 360.0 billion. Total new loans for 2010 reached CNY 7.9 trillion vs. CNY 7.5 trillion annual target.
New loan issuance slowed down in December because banks tried to obey annual targets; Monetary expansion continues.
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*** The Slope Of Hope: COT Report Week Ending 1/4 ***
*** Calculated Risk: Lawler: Early Read on December Existing Home Sales ***
Number of crude oil drilling rigs rose for 12; Number of natural gas drilling rigs fell for 5.
On world scale number of oil & gas drilling rigs rose for 76 in December.
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*** FT BeyondBRICs: China car sales up 33 per cent, official ***
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*** Visualizing Economics: Effect of Inflation on S&P Price Return (1871-2010) ***
Baltic dry index fell 14.3% in the last two weeks; Capesize Index was down 20.5%; Panamax Index rose 4.9%; Supramax Index was down 10.2%; Handysize Index fell 7.1%.
Iron stockpiles & steel inventory mostly unchanged; Iron ore and steel prices stable. Today’s China trade balance data was weak and I would be careful until we find out whether is it government orchestrated year end slowdown or a genuine one.
China trade balance was reported at USD 13.1 billion vs. USD 22.9 billion in November and USD 20.8 billion consensus. Export and import growth were running at 17.9 and 25.6 percent vs. 34.9% and 37.7% in November.
Total accumulated surplus for 2010 was USD 185.6 billion vs. USD 198.2 in full year 2009.
Sharp decline in trade balance surplus and both export and import growth confirm what I already anticipated on freight rates. What is even worse there’s no recovery in freight rates in January (jet).
U.S. railroads originated 240,073 carloads, up 5.6% compared with the same week in 2010 and down 9.9% compared with 5-year average. Week over week change was -6.3%.
Again: Looks like railroad traffic is weakening more than warranted by seasonal effects.
Weekly economic calendar.
Baltic Dirty Tanker Index fell 25.3% in last two weeks; Baltic Clean Tanker Index fell 18.4% in the same period.
To repeat: Large oversupply of ships in the Gulf. Somewhat strange that cost of shipping fell so much during crude oil price rally.
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*** The Big Picture: Succinct Summation of Week’s Events ***
Down 1.6%.
Nonfarm payrolls rose 103.000 in December. The consensus was at 160.000, November reading was an increase of 71.000 (revised +42.000). The unemployment was reported at 9.4% vs. prior reading of 9.8% and consensus of 9.7%.
Private payrolls were up 113.000 vs. 180.000 consensus and 79.000 reading in November (revised +29.000).
Average weekly hours worked for private employees stayed unchanged at 34.3.
Huge miss in both nonfarm payrolls and private payrolls. Unemployment rate fell on reduced participation in labor force (lowest since ’80s). All in all weak report, especially having in mind rosy sunglasses sentiment.
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*** Calculated Risk: Employment Report Preview ***
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