Wedesday Roundup
August 20, 2014
There’s a firmer tone to the dollar, which advanced as high as $1.3275 per euro and JPY 103.42, which was a 4-month high against the Japanese currency. Ten-year Treasury, British gilt, and Japanese JGB yields are a basis point higher. The situation in Ferguson overnight was more orderly.
European equities have fallen. Japan’s Nikkei closed unchanged, and so is the DOW so far. Markets await release of the FOMC minutes from the July 29-30 meeting.
For the first time since Mark Carney’s governorship of the Bank of England began in mid-2013, July’s policy meeting produced dissents on the interest rate decision. Weale and McCafferty wanted a 25-bp rate hike from 0.5%, the Bank Rate level since March 2009, arguing such would promote the goal of tightening in a gradual manner. The majority worried that a rate surprise would lift sterling unduly and wanted to peruse wage data some more before acting. The GBP 375 billion size of the asset purchase program was not changed.
Britain’s industrial trends index climbed 9 points to a reading of 11 in August.
The Bank of Iceland kept a 6.0% key interest rate as expected. Economic slack is diminishing, and normalization will be needed eventually.
Governor Stevens of the Reserve Bank of Australia spoke to parliament in optimistic terms about the economic outlook but complained that the A$ ought to fall further. The exchange rate slid at first to $0.9279 but recouped those losses.
Japan’s all industry index and trade figures were more disappointing than hoped. The all industry index dropped 0.4% in June, twice as much as forecast, and slumped 3.3% in 2Q. There was a larger customs trade deficit than forecast, amounting to JPY 964 billion unadjusted and 1.024 trillion yen seasonally adjusted. Import growth surpassed expectations.
Construction output in the euro area fell 0.7% in June and 0.6% in 2Q. The June level of activity was 2.3% weaker than in June 2013.
Canadian wholesale turnover increased 0.6% on month and 8.7% on year in June.
German producer prices fell 0.8% on year and 0.1% on month in July.
South African consumer price inflation eased to 6.3% in July from 6.6% in June.
Dutch consumer sentiment worsened 4 points to -6 in August.
India’s index of leading economic indicators fell 0.2% last month. The coincident index ticked up 0.1%.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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