Euro Weak but Not Weaker in Early Tuesday Trading

August 26, 2014

The post-Jackson Hole soft tone in the euro continued, but the common currency’s losses haven’t been extended.  Investors believe quantitative easing by the ECB is coming, and there’s speculation of a mutually beneficial accord between Draghi and Yellen to promote euro depreciation.  The euro is trading marginally below $1.32 and lies also south of CHF 1.21.

The dollar is unchanged from Monday’s closing against the euro, Swiss franc and sterling and had dipped 0.1% relative to the yen and 0.2% vis-a-vis the Australian and Canadian dollars.

The kiwi slipped 0.2% against its U.S. counterpart and touched a 6-month low of USD 0.8311 earlier today following disappointing New Zealand trade figures for July.  The balance swung to a deficit of NZD 692 million from a surplus of NZD 242 million in June, as overall exports plunged 11.5% on month, led by a 9.5% drop in shipments to China.

Share prices fell by 0.8% in China, 0.7% in Indonesia, 0.6% in Japan, 0.4% in Hong Kong and 0.2% in Singapore.  But in Europe, there have been equity advances of 0.5% in Spain, 0.3% in France, Britain and Italy, and 0.2% in Switzerland.  The German Dax is 0.1% softer.

The ten-year British gilt yield dropped five basis points, and the 10-year Japanese JGB is back under 0.50% at 0.49% following a disappointing August reading on small business sentiment that fell a whole point and posted the fifth sub-50 score in a row.  The so-called Shoko Chukin index scored a 47.7.

China’s indices of leading and coincident economic indicators went up by 1.3% and 1.2% in July, according to the Conference Board.

Japanese corporate service prices were unchanged on month in July, retaining a 12-month 3.7% rate of increase.

British mortgage approvals fell 0.9% on month to 42.79K in July and were lower than forecast.

Swedish producer prices stagnated on month and recorded a smaller on-year increase of 1.4% in July after 2.3% in June.

Hungary’s central bank is not expected to cut its key interest rate further this month.

Real GDP in South Africa rebounded 0.6% in 2Q, reversing the drop in 1Q, and was 1.0% greater than a year earlier.  South Africa’s index of leading economic indicators increased 0.5% in June.

Singaporean industrial output rose 2.7% on month and 3.3% on year in July.

Aside from weekly chain store sales, the U.S. data release calendar for today features the Case Shiller and FHFA home price measures, the Conference Board’s consumer confidence index, the Richmond Fed manufacturing index and durable goods orders.  There are political primaries today in Vermont, Arizona and Florida.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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