Markets Remain Rattled by Concerns over the Political Direction of the United States
August 18, 2017
The dollar lost 0.5% overnight against the yen, loonie, kiwi and Aussie dollar. The greenback also dipped 0.1% versus the euro, Swissy, yuan and sterling.
Japan’s Nikkei dropped 1.2% or 232 points overnight. In other selected markets around the Pacific Rim, stocks lost 1.0% in Hong Kong, 0.9% in India, 0.6% in Australia and 0.5% in Taiwan and Singapore but were unchanged in China. In Europe, equities have thus far fallen 1.0% in Greece, 0.9% in the U.K. and France, 0.8% in Spain, 0.7% in Switzerland but just 0.4% in France and 0.3% in Germany.
In this swirl of risk aversion, Comex gold moved above $1,300 to $1,301.6 per ounce, a rise of 0.7%, and WTI oil advanced 0.4% to $47.29 per barrel.
The ten-year German bund yield dipped a basis point, while its U.S., Japanese and British counterparts remain at Thursday closing levels.
Euroland’s seasonally adjusted current account surplus narrowed 29.5% on month to an 11-month low in June of EUR 21.5 billion. The EUR 336.5 billion surplus between mid-2016 and mid-2017 equaled 3.1% of GDP. The unadjusted EUR 28.1 billion current account surplus in June was EUR 13.4 billion smaller than the surplus in June 2016.
Construction output in the euro area fell in June by 0.5%, its third decline in four months. The level of construction in the second quarter was nonetheless 3.3% greater than a year earlier versus a 1.8% on-year rise in the first quarter.
A 9.7% on-year rise in Chinese property prices in July was down from 10.2% in June and 12.6% in November. One has to go back to August of last year to find a smaller advance. House prices increased on month in 56 of 70 cities, down from 60 cities reporting an increase in June.
Canadian consumer prices rose 0.2% last month but just 1.2% over the past year. On-year measures of core inflation were marginally higher and lay between 1.3% and 1.7% in July.
German producer prices rose 0.2% in July but were unchanged on balance over the latest three reported months, and the on-year increase of 2.3% was the smallest since last December.
The Central Bank of Chile’s main interest rate was kept at 2.5% after the August review. It’s been at that level since a 25-basis point cut on May 18.
In the year to July, Polish retail sales and industrial production rose by 7.1% and 6.2%, while producer price inflation in that economy printed in July at 2.2%, up from 1.8% in June but below May’s reading of 2.5%.
Malaysian GDP grew 5.8% between 2Q16 and 2Q17. The second quarter current account surplus was nearly twice as big as in the first quarter.
The U.S. leading and coincident economic indicators each climbed 0.3% in July. Still to come are the Fed’s monthly measure of labor market conditions and the Reuters/U. Michigan index of consumer sentiment.
Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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