A Weaker Dollar
April 8, 2015
The U.S. currency fell overnight by 1.2% against the kiwi, 1.1% relative to the Australian dollar, 0.8% vis-a-vis the loonie, 0.6% versus the Swiss franc, 0.5% against the euro, and 0.4% versus the yen. The yuan is 0.1% softer.
Share prices advanced 3.8% in Hong Kong, 0.8% in in Japan and China, 0.7% in India, and 0.6% in Australia and South Korea. But equities are lower in Europe, including drops of 0.7% in Greece, 0.4% in Germany, 0.3% in Italy and 0.2% in Spain. The British Ftse has marched to a different drum, rising 0.5%.
The 10-year Japanese JGB yield advanced by three basis points, whereas its German and British counterparts are down by two and one basis points.
WTI oil fell 2.3% to $52.75 per barrel. Comex gold has dipped 0.1% to $1,209.10 per troy ounce.
The Bank of Japan left its policy unchanged and released a statement with the same essential growth estimate as after the March meeting. Core inflation is now said to be running at “about zero percent.” That a downward revision from a range of 0-0.5% in the March statement, around 0.5% in February’s, and 0.5-1.0% in the January statement. Dissenter Kiuchi submitted a proposal to cut the targeted growth of the monetary base back to JPY 45 trillion from JPY 80 trillion per year, which was rejected by a majority of the Board. There is a second April meeting scheduled for April 30.
Several Japanese economic indicators were reported.
- The current account surplus in February of JPY 1.44 trillion was 2.4 times greater than in February 2014 and also exceeded street expectations. But merchandise exports were up only 0.4% on year versus a 6.2% drop in imports. The seasonally adjusted current account surplus dropped to JPY 604 billion from JPY 1.058 trillion in January.
- Japanese customs trade recorded a JPY 102 billion deficit in March 1-20, down from JPY 1.167 trillion a year earlier, as imports plunged 13.8% and exports climbed 8.8% on year.
- Stock and bond transactions last month generated a JPY 3.05 trillion net capital outflow.
- There were 5.5% more bankruptcies in March than a year earlier versus an 11.5% on-year drop in February.
- The economy watchers index increased 2.1 points in March to a reading of 52.2. The outlook component, however, only rose 0.2 points.
German factory orders sank 0.9% in February on top of a 2.6% decline in January. Orders in the first two months of 2015 on average were 1.6% below the 4Q14 level. Orders in February were also 1.3% weaker than a year earlier. In February, domestic demand stagnated, while export orders sank 1.6% on month.
Germany’s construction purchasing managers index edged up 0.2 points in March to a four-month high of 53.3.
The retail purchasing managers index for the eurozone increased 2.2 points in March to a four-month high of 48.6, which still constitutes a contraction but at a slower pace of decline. Germany’s 53.0 reading was at a 9-month high, but the French and Italian scores were below 50 at 45.7 and 45.7. These were the highest reading since December and last April, respectively.
Retail sales volume in the eurozone declined by an as-expected 0.2% in February. Sales in January-February were 1.3% above the 4Q14 level. February sales were also 3.0% greater than a year earlier.
British new car sales recorded on-year growth of 6.0% in March, half as much as February’s increase. British shop prices fell 2.1% between February 2014 and February 2015.
Swiss consumer prices rose 0.3% on month but fell by 0.9% on year in March.
The French trade deficit narrowed 6% to EUR 3.5 billion in February.
In the year to February, Turkish and Hungarian industrial output rose by 1.0% and 5.8%.
Weekly oil inventories highlights a lean U.S. data calendar today. The main event will be publication of FOMC minutes.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Japan, eurozone retail sales and retail PMI, Japanese current account