Little Market Leadership Due to Holiday Closures

May 29, 2017

Markets are closed Monday in the United States for Memorial Day, Great Britain for a late spring bank holiday, and both China and Taiwan for the Dragon Boat Festival.

The dollar is down 0.3% against the peso, 0.2% versus sterling and 0.1% relative to the loonie, euro, Swiss franc and kiwi. The dollar has edged 0.1% higher, on the other hand, relative to the Australian dollar and Japanese yen.

Japan’s Nikkei closed unchanged. Elsewhere in the Pacific Rim, stocks fell 0.8% in Australia, 0.4% in New Zealand and 0.1% in Indonesia and South Korea but rose 0.4% in Hong Kong and 0.3% in India. Share prices in Europe have tumbled 1.5% in Italy where there’s speculation about another early election and 1.0% in Greece but only small changes in the French, Spanish and Swiss markets.

Ten-year German bunds, Japanese JGBs and U.S. Treasury futures are unchanged.

West Texas Intermediate crude oil dropped 0.5% to $49.55 per barrel. Comex gold is 0.1% softer at $1,270.30 per troy ounce.

In central banking news, ECB President Draghi will be testifying before the EU parliament. San Francisco Federal Reserve District President Williams endorsed a gradual rise in the federal funds rate and predicted a much smaller central bank balance sheet by 2022. Japan’s lower house of parliament approved two new BOJ board members, Kataoku and Zuzuki, each of whom is more dovish than Kiuchi and Sata whose terms expire in July. The upper house also needs to vote on these selections.

Comments from European leaders like Chancellor Merkel of Germany confirmed that strains at the G7 summit between them and President Trump were substantial. Merkel said Europe’s good relationship with the United States since the late 1940s will now change and that Europe needs to move on in a different way. On returning home, Trump cranked up his Twitter messages anew with a barrage of attacks on the media. He did not hold a news conference.

Euroland M3 money growth slowed to 4.9% in April from a 12-month increase of 5.3% in March. On-year growth in marketable instruments, the difference between M3 and M2, collapsed to 1.5% from 9.0%. Loans to households and to non-financial firms both posted on-year advances of just 2.4%.

Chinese corporate profits in April were 14% greater than a year earlier. That increase represents a big slowdown from the first-quarter pace. Profits in January-April were up 24.4% on year, for instance.

Sweden’s trade balance swung from a SEK 4.9 billion surplus in the first third of 2016 to a deficit of SEK 2.0 billion in January-April 2017. April alone saw an SEK 2.6 billion deficit.

Producer prices in Singapore fell 0.6% on month in April but accelerated in on-year terms to 7,6%. Oil prices were 35.9% greater than a year ago.

Consumer sentiment in Finland improved 2.6 points to a May reading of 24.1.

Spanish retail sales growth accelerated further in April to a 12-month 1.8% advance.

Icelandic CPI inflation slowed to 1.7% in May.

Israel’s Monetary Committee is holding its monthly policy review today and is not expected to change the 0.1% key central bank interest rate.

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

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