Markets Calmer than Yesterday

January 13, 2017

After slumping Thursday, the dollar is unchanged today against the yen, Australian dollar, loonie and sterling. The greenback slipped a mere 0.2% against the euro, Swissie and peso since Thursday’s close and is down 0.1% vis-a-vis the yuan and kiwi.

The Japanese Nikkei recovered 0.8%. Elsewhere in the Pacific Rim, equities have fallen 0.8% in Australia, 0.5% in South Korea, and 0.4% in Indonesia but risen by 0.6% in Hong Kong, and 1.1% in Singapore.

Stocks in Europe recovered 1.6% in Italy, 0.8% in Spain, 0.9% in France, 0.6% in Germany and Switzerland, and 0.4% in the U.K..

Ten-year British gilt and Japanese JGB yields rose a basis point, whereas the German bund counterpart is unchanged.

West Texas Intermediate crude oil fell 1.1% to $52.42 per barrel.

Comex gold is hovering just below $1,200 and 0.2% softer than Thursday’s close.

Fed Chair Janet Yellen at a town meeting for educators expressed satisfaction with recent developments in the labor market, wages and inflation. She did not comment directly about monetary policy but defended Dodd-Frank and warned against repealing extensive parts of the legislation.

China’s trade surplus shrank 8.5% on month to a nine-month low of $40.82 billion in December. Exports were 6.1% lower than a year earlier versus a 0.1% uptick posted in the year to November. Imports climbed 3.1% on year, their second advance in a row.

Japanese M2 money growth accelerated to 4.0% on year in December, the greatest pace of 2016, and broad liquidity picked up to 2.1%. Average growth of M2 and broad liquidity for 2016 as a whole was 3.5% and 2.3% after gains in 2015 of 3.7% and 4.0%.

Japanese bankruptcies swung from an on-year drop of 2.5% in November to an increase of 1.6% last month.

The Bank of Korea retained a record low 1.25% 7-day repo rate. It’s been at 1.25% since a 25-basis point cut in last June. There were 25-bp reductions also in August and October of 2014 and March and June of 2015.

German wholesale prices leaped 1.2% on month in December most since March 2011. On-year WPI inflation of 2.8% constituted a 46-month high.

In the year to November, retail sales rose 6.3% in The Netherlands and 1.1% in Singapore.

Between end-2015 and end-2016, consumer prices climbed 1.8% in Hungary, 1.6% in Spain and 1.0% in Finland but fell 0.5% in Romania. Greek import prices climbed 3.1% in the year to November.

The Czech current account surplus of CZK 4.6 billion in November was only about a quarter as large as October’s surplus. Romanian real GDP increased 4.5% in the year to 3Q16.

U.S. data being released later today include producer prices, retail sales, existing home sales and the U. Michigan consumer sentiment index for early January. Indonesia has a central bank meeting. Next week sees the World Economic Forum in Davos (January 17-20) and Donald Trump’s inaugural a week from today.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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