Global Risk Aversion Ahead of U.S. August Jobs Report
September 4, 2015
Stocks in the Pacific Rim fell 2.2% in Japan and Indonesia, 1.5% in Singapore and South Korea, 0.7% in Hong Kong, 0.5% in New Zealand and 0.2% in China.
Stocks in Europe are down 2.4% in Italy, 2.1% in Germany, 2.2% in France, 1.8% in the U.K., 2.0% in Spain, and 1.5% in Switzerland.
Today marks the 86th anniversary of the pre-Great Depression high in U.S. equities. The bottom wasn’t reached until July 8, 1932, almost three years later.
Ten-year sovereign debt yields dropped eight basis points in the U.K., four bps in Japan and two bps in Germany.
WTI crude oil slipped 0.5% to $46.50 per barrel. Comex gold is 0.2% softer at $1,123.60 per ounce.
The yen at 119.15 per dollar has been well bid, gaining 0.6% overnight. The U.S. currency otherwise rose 0.4% relative to the Australian and New Zealand dollars, 0.3% versus the loonie, 0.2% vis-a-vis sterling and 0.1% against the Swiss franc, but the dollar is unchanged against the euro and yuan.
Both the ADP estimate of U.S. private employment growth released Wednesday and the weekly jobless insurance figures out yesterday were somewhat weaker than anticipated. Today’s labor department report on jobs, unemployment, and wages is likely to be critical in the Fed’s decision later this month on whether to start lifting the federal funds rate or stay put.
German industrial orders fell 1.4% in July, most since January and were 0.4% below the 2Q average and 0.6% lower than a year ago. This weaker-than-forecast report was dominated by a 5.2% drop in foreign demand. Orders for consumer goods fell 6.3% on month.
Germany’s construction PMI dropped 0.3 points to a 7-month low of 50.3 in July. The reading connotes scant growth in the sector.
After jumping to a 54-month high of 54.2 in July, the eurozone retail purchasing managers index dropped back to a 2-month low of 51.4 in August. Germany’s retail PMI declined 3.0 points to 54.7, and the French and Italian indices, which had been above the 50 no-change threshold in July, settled back to 2-month lows of 49.5 and 48.7, respectively.
Hong Kong’s private purchasing managers index slumped 3.8 points to a 76-month low of 44.4 in August, implying a fast pace of contraction.
A two-day meeting of Group of Twenty finance ministers and central bank leaders concludes today in Ankara, Turkey.
Japanese labor cash earnings rose just 0.6% on year in July after being unchanged in May and down 0.6% in June.
Swiss consumer prices record a second straight monthly drop in August and a somewhat larger year-over-year decline of 1.4%.
Swedish industrial output sank 3.0% on month and 1.9% on year during July.
French consumer confidence stagnated at an unchanged reading of 93 in August, seven points below its long-term average score.
Between the second quarters of 2014 and 2014, real GDP edged 0.1% higher in Finland, a member of Euroland, and rose 3.3% in Romania and 2.5% in Hungary.
British new car registrations, a measure of sales, were 9.6% greater in August than a year earlier.
Filipino consumer price inflation slowed to 0.6% in August from 0.8% in July, while that economy’s PPI sank 6.4% in the year to July. Malaysia’s MYR 2.4 billion trade surplus in July was smaller than those of MYR 8.0 billion in June and MYR 5.5 billion in May.
Canadian labor statistics are also being released today, along with the IVEY-PMI index.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.