Many Markets Closed for May Day
May 1, 2014
Activity has been generally quiet but liven up when several U.S. indicators get released later. There’s been little reaction to yesterday’s FOMC statement, which contained no surprises.
Scheduled U.S. data releases include personal income and spending, the manufacturing purchasing managers survey, motor vehicle sales, construction spending and weekly jobless insurance claims and Bloomberg-compiled consumer comfort. Fed Chair Yellen will be delivering a speech.
The main currency development today has been sterling’s rise to a five-year high of $1.6923. The pound rose 0.5% against the dollar on a 1.5-point advance in the U.K. manufacturing purchasing managers index to a 5-month high of 57.3 in April. Both orders and production grew more rapidly than in March, while input prices declined.
London has been one of the few markets open in Europe. Those in Germany, Spain, Greece, France, Italy and Portugal are closed. Euroland’s PMI, normally reported on the first business day each month, will instead be released tomorrow.
Many far eastern markets also observed May Day to honor laborers, notably China which will stay shut Friday. Despite that closure, officials in Beijing released the government’s manufacturing PMI (CFLP), which edged up 0.1 point to a weak 50.4 level. Orders dropped in another sign that growth could prove weaker than the government’s target unless fresh macroeconomic stimulus is undertaken. The jobs component of the PMI survey printed below the 50 threshold at 48.5.
The dollar is unchanged against sterling, the Australian dollar and the Chinese yuan. There’s been mild declines in the greenback of 0.3% versus the Swiss franc, 0.2% against the euro, and 0.1% vis-a-vis the kiwi and yen. The dollar is 0.1% firmer against its Canadian counterpart.
Japan’s Nikkei advanced 1.3%, and the British Ftse has traded 0.3% higher. Share prices fell by 0.7% in Australia and 0.5% in New Zealand but rose 0.4% in Indonesia.
Gold is down 0.9% at $1,283.70 per ounce. West Texas Intermediate oil fell by 0.5% to $99.24 per barrel.
The ten-year Japanese JGB yield is steady at 0.61%, and the British 10-year gilt yield has firmed a basis point to 2.67%.
The Australian manufacturing purchasing managers index slumped 3.1 points to a 9-month low of 44.8 in April. The orders component plunged 10.5 points to 41.8, while the 42.6 reading for production was 6.6 points lower than in March. Employment scored weakly at 43.6.
The Irish manufacturing PMI climbed 0.6 points to 56.1 in April, indicating the fastest rate of growth since February 2011.
The Dutch manufacturing PMI dropped another 0.3 points to a 9-month low of 53.4 due to slower growth in production and orders and a quickening decline in input prices.
The British Nationwide house price index advanced twice as fast as expected between March and April, 1.2%, which produced the biggest 12-month increase (10.9%) since June 2007. The Bank of England reported 67,135 mortgage approvals in March, 3.5% fewer than in February and the smallest total in six months. M4 money contracted 0.3% in the year to March after posting growth of 0.9% on year in February.
New Zealand M3 money growth slowed to 5.0% in March from an on-year pace of 6.8% in February.
Australian export and import prices posted 12-month gains in the first quarter of 3.6% and 3.2%. Both rises were well above analyst expectations and resulted in 12-month rises of 7.0% and 8.6%. Australian commodity prices, expressed in SDR terms, fell 12.6% in the year to April, by contrast.
South Korean CPI inflation edged up 0.2 percentage points to 1.5% in April, still below the 2.5-3.5% target range of the Bank of Korea. Core inflation was at 2.3%. In Thailand, consumer prices recorded an on-year advance of 2.5% in April versus 2.0% in the first quarter.
The IMF approved a $17 billion loan to support besieged Ukraine.
In addition to the aforementioned U.S. data releases scheduled today, the Canadian manufacturing PMI arrives as well. U.S. and Canadian monthly labor statistics are due tomorrow.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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