Slightly Softer Dollar and Yen

November 6, 2013

The dollar edged 0.1% higher against the yen but is otherwise down 0.5% against the kiwi, 0.4% versus the euro, 0.3% relative to the Swiss franc, sterling and Australian dollar, and 0.1% against the loonie.  The yuan is unchanged on a day that saw Chinese share prices drop 1.3%.

In other stock markets, share price lost 0.7% in the Philippines, 0.4% in India, and 0.2% in Malaysia.  Such closed unchanged in Singapore, Hong Kong and Australia and rose by 0.8% in Japan, 0.6% in Indonesia, and 0.2% in Taiwan.  Equities in Europe so far are up 1.0% in France, 0.6% in Italy, 0.4% in Germany, 0.3% in Spain and 0.1% in Great Britain.

Gold and oil prices have risen by 0.8% and 0.9% to $1317.90 per ounce and $94.21 per barrel.

The ten-year German bund yield dipped two basis points, while the 10-year Japanese JGB and British gilt yields are a basis point higher today.

In key U.S. elections yesterday, Chris Christie, a non-Tea Party Republican, was reelected governor of New Jersey by a wide 60.5-38.0% victory margin.  Terry McAuliffe won the Virginia governor’s race by a narrower-than-expected 48.0-45.5% margin over his Tea Party and Republican opponent, Ken Cuccinelli.  In a republican Alabama primary election ahead of next month’s vote to fill a vacant seat in the House of Representatives, voters chose the establishment republican Byrne over his Tea Party opponent by 52% to 48%.  These off-year elections had been framed as either a confidence vote in Obamacare or a confidence vote on the Tea Party. 

German industrial orders leaped 3.3% in September following a 0.3% dip in August and were 7.9% higher than in September 2012.  The outsized gain was led by capital goods (up 5.7%) and consumer goods (+2.7%).  Domestic orders actually slid 1.0%, but export orders jumped 6.8%.  Orders climbed 1.6% sequentially in the third quarter following rises of 1.5% in 2Q and 0.5% in 1Q.

The German services sector purchasing managers index for October was revised upward to 52.9 from a preliminary estimate of 52.3.  That revision fell 0.8 points short of September’s 7-month high but was still marginally above the August reading of 52.8.  The German composite PMI of 53.2 matched September’s reading and also was revised upward from a flash estimate of 52.6.

French service and composite PMIs also got revised higher, the former by 0.7 to 50.9 and the latter by 0.4 to 50.4.  These final results are similar to September readings but signal an economy that’s finely balanced between expansion and contraction.

Spain’s services PMI of 49.6 was at a 2-month high but somewhat lower than analyst expectations.  The Spanish composite PMI score of 50.1 was also at a 2-month high.

Italy’s services PMI of 50.5 was at a 2-month low, in contrast, and 0.2 points less than in September.  The composite Italian PMI of 51.3 was also a 2-month low.

Euroland’s composite purchasing managers index punched in at 51.9 versus a flash estimate for October of 51.5 and a September reading of 52.2, which had been the best score in 27 months.  The Ezone services PMI of 51.6 was at a 2-month low but 0.7 points above its preliminary estimate.

Retail sales in the euro area fell 0.6% in September, mainly on large drops of 2.5% in Spain and 6.2% in Portugal.  Sales volume was 0.3% higher than in September 2012.  Retail sales still managed to post a 2.5% annualized advance between 2Q and 3Q.

Russia composite PMI of 53.3 and services PMI of 52.5 constituted the third straight month with readings over 50 and thus signaling expanding activity.  Moreover, the readings respectively represented the fastest growth in 7 and 6 months.

Two central banks announced unchanged monetary policies.  The Polish interest rate stays at 2.5%, and the Icelandic 7-day collateralized lending rates holds at 6.0%.

Japan’s service-sector purchasing managers index climbed 2.3 points to 55.3, while the composite PMI went up 3.8 points to a buoyant 56.0 in October.  The first reading of Japanese 3Q GDP growth will be reported on the 14th of this month.  Minutes from the early October Bank of Japan Board meeting revealed information that is already known, namely the views that Japan will recover moderately, progress has been made on ending deflation, but that considerable uncertainty clouds the future and risks remain.

On-year Indonesian GDP growth slowed to 5.6% in 3Q from 5.8% in the second quarter.

British industrial production grew 0.9% in September, almost twice as much as forecast.  The 12-month 2.2% rate of increase was the most since the start of 2011.  Production climbed 0.6% in 3Q, including a sequential 0.9% rise in factory output, which also rose 1.2% between August and September.

Britain’s Halifax house price index went up 0.7% in October and was 6.9% higher in August-October than a year earlier.  The British Retail Consortium reported a 0.5% drop in shop prices last month; it was the sixth decline in a row.

Australia reported a third straight monthly trade deficit, but the size of the September imbalance was only A$ 284 million after A$ 693 million in August and A$ 1.413 billion in July.  A worrisome element of the report was the weakness of exports to China.

New Zealand labor costs rose 0.4% on quarter and 1.6% on year in 3Q, very similar to trends in the previous quarter.  New Zealand jobs climbed by 1.2% last quarter and 2.4% on year, while the unemployment rate slipped to 6.2% from 6.4% in 2Q.

Czech industrial production fell 2.8% on month in September, but the trade surplus nearly doubled to CZK 35.1 billion.  Hungarian retail sales, up 0.3% on year in September, were weaker than anticipated.

Canadian building permits swung from a 14% on-year drop in August to a 0.2% uptick in September.

U.S. mortgage applications fell 7.0% last week, erasing the prior week’s advance.  The U.S. index of leading economic indicators and Canadian IVEY-PMI reports are due later today.  Tomorrow’s focus will be the ECB and Bank of England meetings.  Australian labor statistics are also due, as well as U.S. GDP, and central bank announcements in the Czech Republic, Serbia, and Malaysia.

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

Tags: , ,


Comments are closed.