Japan’s recession deepens

Monday, December 08, 2014

Japan’s recession is deepening as the latest GDP report showed a contraction of 1.9% in Q3 2014 (est. of -0.5%) instead of a preliminary estimate of 1.6% announced on 17th November. The disappointing data initially hurt investors’ sentiment, though Prime Minister Shinzo Abe continues to increase his parliamentary majority in snap elections later this month. However, the Nikkei index remained in positive territory adding 15.20 points (+0.08%) and broke above 17,900. The Hang Seng index also edged higher, gaining 45.03 (+0.19%) to finish the session at 24,047.67.

Nikkei index

NKY Index (Nikkei 225)  Daily 30 2014-12-08 08-57-07

Germany’s industrial production rose 0.2% m/m in October compared to 1.4% in September, missing analysts’ expectations of a 0.4% rise. European equity markets opened the week in negative territory as weak Japanese GDP data and the current low crude oil prices weighed on market sentiment. The CAC, DAX, IBEX and London equity benchmark came under renewed pressure this morning retreating between 0.3% and 0.5% in early trade. The release of Eurozone’s Sentix investor confidence data for December could provide further direction.

Crude oil prices extended losses this morning as WTI front month futures plunged to retest $65 per barrel and Brent front month futures slid towards $68 per barrel. The oil fundamentals remain fairly bearish while global oil demand has been fairly sluggish in the last few months.

WTI front month futures

CLF5 Comdty (WTI CRUDE FUTURE  J 2014-12-08 08-57-34

Precious metal prices climb higher in early trade this morning, with gold heading towards a possible retest of $1,200/ounce. Silver edged higher this morning breaking above 16.30 while platinum and palladium extended gains within the recent range.   

A typhoon in Philippines forced at least 900,000 people to evacuate their homes, while at least 21 people died. The tropical storm Hagupit highlighted the stakes for envoys at United Nations climate talks as a rift opened over how to fight global warming.

Events for today:

2350

JP

Q3

GDP (7/12/2014)

0700

DE

Oct

Industrial Production

0930

EZ

Dec

Sentix Investor Confidence

 

All times UK Local Time

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