Share Prices Down in Europe as Week Draws to a Close

September 16, 2016

Equities have fallen 1.6% in Italy, 0.6% in Spain, 0.5% in Germany, 0.4% in France, 0.3% in Switzerland, and 0.2% in Greece. ┬áThe British Ftse is flat, and stocks earlier rose 1.1% in Australia, 0.9% in New Zealand, 0.8% in Singapore, and 0.7% in Japan and India. Many Asian markets — for instance, China, Taiwan, South Korea and Malaysia — are closed for the mid-Autumn Harvest Festival.

The dollar strengthened 0.5% against sterling, 0.4% relative to the Swiss franc, 0.3% vis-a-vis the loonie, 0.2% against the kiwi, and 0.1% versus the Australia and dollar and euro. The yen climbed 0.2% against the dollar overnight.

Ten-year German bund and British gilt yields slipped four and three basis points. The 10-year Japanese JGB yield is steady at negative 0.05%. The German yield edged back below zero.

West Texas Intermediate crude oil dropped another 1.2% to $43.38 per barrel, depressed by increased supply from African producers. Comex gold eased 0.1% to $1,316.20 per ounce.

The Russian ruble had slipped around a half percent in anticipation of a Russian interest rate cut. Officials at the Central Bank of Russia didn’t disappoint analysts, having just announced a 50-basis point cut in the key interest rate to 10.0%. This is the first cut since June and, according to the statement, the last one in 2016. Pending the evolution of inflation and expected inflation, more reductions are possible in the first half of next year.

Eurozone labor costs decelerated abruptly last quarter. Their on-year advance was 1.0%, down from 1.6% both in the first quarter and in the second quarter of 2015. Labor costs in Italy recorded an on-year decline of 1.1%, and the increase in Germany was 1.8%, down from 2.9% a year earlier.

Italy’s trade surplus widened to EUR 7.79 billion in July from EUR 4.66 billion the month before.

Icelandic CPI inflation stayed level at 1.1% in August. Czech producer prices in the same interval fell by 3.4%.

The Filipino current account surplus of $65 million last quarter was $20 million wider than that in the first quarter.

New Zealand household confidence improved 2.8% in September.

Investors await three U.S. economic indicators: consumer prices, the U. Michigan consumer sentiment index, and Treasury-compiled capital flows. Canada’s monthly survey of manufacturing sales, orders and inventories arrives, too. Next week will be dominated by the U.S. and Bank of Japan monetary policy meetings.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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