Dollar Weakens Pretty Much Across the board
December 9, 2015
Share prices in Asia and Europe are mostly lower, but a 0.4% uptick in China’s market is an exception. Stocks fell 1.3% in India and Indonesia, 1.0% in Japan, 1.4% in Taiwan and 0.6% in New Zealand and Australia. Equities in Europe have so far lost 3.8% in Greece, 1.1% in France, 1.0% in Switzerland, 0.6% in Spain, 0.8% in German y, 0.4% in Italy and 0.1% in Britain. In the first half hour of U.S. trading, the Dow rose 0.5%, while the S&P was little changed on net.
The dollar has depreciated 0.8% against the yen and sterling, 0.7% relative to the euro, 0.4% versus the Swiss franc, and 0.2% vis-a-vis the New Zealand, Canadian and Australian dollars. The yuan is steady.
Gold and oil prices climbed 0.8% to $1,084.00 per ounce and $37.82 per barrel.
The 10-year British, U.S. and German sovereign debt yields are up by 3, 2, and 1 basis points. The 10-year Japanese JGB yield dipped a basis point, in contrast.
The Governor of the Bank of Canada and a member of the ECB Governing Council made contrasting remarks.
- BOC Governor Poloz did not rule out adoption of a negative central bank interest rate if deemed necessary.
- Austrian central bank chief Nowotny, who also votes on the ECB Governing Council, blamed the bad analysis of central bank market watchers for the reaction of disappointment to last week’s ECB policy changes, saying the pre-meeting market hype of dramatic easing was based in analyst fancy, not fact, and that policymakers will not be stampeded by pundits in their monetary policy actions.
The Bank of Iceland’s key interest rates were not hiked further this month as most analysts were expecting. Reserve requirements were relaxed.
Japan experienced a much bigger-than-forecast 10.7% leap in core private domestic machinery orders during October following a 7.5% rebound in September. Foreign machinery orders surged 41.6% on month, while public sector orders dived 39.7%. Total machinery orders were 22.5% greater than in October 2014.
Machine tool orders in Japan fell 17.9% in November, their fourth straight on-year double-digit decline.
Chinese CPI inflation ticked 0.2 percentage points higher to a 2-month high of 1.5% in November, but there was no on-month change in consumer prices. Producer prices in China fell 5.9% on year, matching October’s result and marking the 45th straight month on negative producer price inflation.
German merchandise imports sank 3.4% on month in October, most in 42 months. Exports fell 1.2% on month. The German current account posted a EUR 23.0 billion surplus in the latest reported month, and the January-October current account surplus of EUR 199.5 billion was 18.2% wider than a year earlier. The seasonally adjusted EUR 20.7 billion merchandise trade surplus in October compares to monthly averages of EUR 20.3 billion in the third quarter, 20.9 billion euros in the first half of 2015, EUR 18.1 billion in full-2014, and EUR 15.8 billion in 2013.
Total labor costs last quarter in Germany were unchanged from 2Q, their lowest on-quarter pace in two years, and the on-year total labor cost inflation rate of 2.4% was down from 3.0% in 2Q and at a five-quarter low.
Swiss seasonally adjusted unemployment stayed at 3.4% in November.
The British Chamber of Commerce revised GDP growth forecasts for this year, 2016, and 2017 lower to 2.4%, 2.5% and 2.5%, respectively.
U.S. mortgage applications rose 1.2% last week. The 30-year fixed mortgage rate of 4.14% was up by two basis points.
Mexican CPI inflation eased 0.3 percentage points in November to 2.2%, while PPI inflation in that economy remained steady at 3.5%. Brazilian CPI inflation in November of 10.5% as marginally higher than expected and 0.6 percentage points above the October pace. South African CPI inflation edged up 0.1 percentage point to a 4-month high of 4.8%.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: China CPI, German current account, Japanese machinery orders