Dollar Nicely Bid this Friday

May 17, 2013

Fresh impetus for a firm dollar was provided by San Francisco President Williams.  Usually aligned with Bernanke, he expressed growing confidence in the U.S. labor market and suggested that quantitative easing could be scaled back by summer.

The dollar has climbed especially against commodity-sensitive currencies like the loonie (0.7%), kiwi (0.6%) and Aussie dollar (0.5%).  The greenback also gained 0.2% overnight versus the yen, euro and sterling and by 0.1% relative to the Swiss franc.  The dollar is off 0.1% against the yuan, however.

Gold slid another 0.5% to $1379.80 per ounce.  Oil firmed 0.5% to $95.59 per barrel.

The yields on ten-year British gilts and German bunds are two and one basis points lower.  Their Japanese counterpart was unchanged.

Share prices rose  1.5% in China, 1.3% in Indonesia, 0.8% in South Korea, 0.7% in Japan and 0.2% in Hong Kong but fell by 0.8% in New Zealand, 0.4% in the Philippines and 0.3% in Taiwan.  European stocks are fairly stable, with gains of 0.3% in Milan, 0.2% in London and Paris, and 0.1% in Madrid but no change on the  Frankfurt bourse.

Core domestic private Japanese machinery orders leaped 14.2% in March, about five times greater than forecast and were at the highest level since October 2008 as well as 10.5% above the first-quarter mean.  Foreign orders for Japanese machinery soared 52.1%, while government orders went up by a robust 15.2%.

Japanese housing loans were 3.2% higher than a year earlier in the first quarter of 2013.  Singapore’s trade surplus contracted 9% to 4.21 billion Singapore dollars last month, depressed by weak exports of electronics.

China’s index of leading economic indicators, according to the Conference Board, advanced by a sharp 1.5% in April, buoyed by interest in real estate and livelier credit demand.  The index of coincident economic indicators edged up only 0.2%.

New Zealand reported quarterly producer prices and monthly consumer confidence.  Each went up solidly.

  • The 0.8% quarterly increase of producer output prices in 1Q13 was the most since the second quarter of 2011.  The PPI-O was only 0.1% above a year ago, nonetheless.  Producer input prices also rose 0.8% and were unchanged from a year earlier.
  • Consumer confidence climbed 3.8% for a second straight month in May, following a 5.1% drop in March.  This was the fifth improvement in six months.

Euro area construction output sank another 1.7% in March and by 7.9% from a year earlier.  Output in the first quarter was 3.0% less than in 4Q12 and down 4.2% in on-year terms. 

EU car sales were 1.7% higher than a year before in April, their first on-year advance in over a year and a half.

Spain’s indices of leading and coincident economic indicators each fell by 0.2% in March. Spain recorded an unprecedented EUR 0.6 billion trade surplus in March.

Icelandic harmonized consumer price inflation remained at 1.9% last month despite a 0.9% monthly increase in prices.

The ECB announced that the latest 3-year LTRO repayment was just EUR 1.12 billion, a sixth as much as the prior repayment.

Chile’s central bank retained a 5.0% interest rate in spite of lower inflation and weaker domestic growth.

The U.S. data release calendar features the U. Michigan/Reuters index of consumer sentiment and the Conference Board index of leading economic indicators.  Canadian consumer prices and wholesale turnover figures arrive.  Fed Chairman Bernanke and Minneapolis Fed Pdt Kocherlakota speak publicly.  FOMC minutes and Bernanke congressional testimony are calendared for next Wednesday.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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