Saturday, 1 February 2014

Stocks and emerging market currencies fall

Market nervousness returned on Friday as stocks and emerging-market currencies fell again. The S&P 500 fell 0.7 percent, the US 10-year Treasury yield fell four basis points to 2.65 percent and the yen climbed 0.5 percent against the US dollar for its biggest monthly advance since 2012.

Economic data on Friday were mixed.

In the US, consumer spending rose 0.4 percent in December but personal income was flat.

Also, the Thomson Reuters/University of Michigan consumer sentiment index fell to 81.2 in January from 82.5 in December and the Institute for Supply Management-Chicago business barometer fell to 59.6 this month from 60.8 in December.

In the euro area, the inflation rate fell to 0.7 percent in January from 0.8 percent in December but the unemployment rate was unchanged at 12.0 percent in December.

The region's largest economy, Germany, saw retail sales fall 2.5 percent in December.

However, in the UK, GfK's consumer confidence index rose to -7 in January, its highest reading since September 2007, from -13 in December.

In Japan, consumer prices excluding fresh food rose 1.3 percent in December from the previous year. For 2013 as a whole, prices were 0.4 per cent higher than the previous year, marking the first annual increase since a 1.5 per cent rise in 2008. The increase was largely driven by higher energy cost.

Other reports on Friday showed that Japan's factory output rose 1.1 percent in December, household spending rose 0.7 percent and the unemployment rate hit a multi-year low of 3.7 percent.

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