Quiet Start to Wednesday

October 11, 2017

The dollar is marginally softer, with overnight dips of 0.3% against the peso, 0.2% versus the yen and Aussie dollar and 0.1% vis-a-vis the euro and Swiss franc. The dollar also rose 0.4% against the yuan and 0.1% relative to sterling but is flat against the loonie and kiwi.

Tensions over Spain’s political situation eased a bit. Catalan’s separatist leader did not declare independence yesterday as had been feared. The Spanish IBEX rebounded 1.5%.

Today’s main event will be the release of FOMC minutes this afternoon. Dallas Fed President Kaplan expressed reservations against raising the federal funds rate too hastily in the face of continuing subdued global inflation. Kaplan wants to be sure that the Treasury yield curve doesn’t invert.

Japan’s Nikkei rose another 0.3% to its best levels since late 1996. Stocks rose marginally in China but fell in Australia. European stocks aside from the IBEX have barely moved today.

West Texas Intermediate crude oil advanced 0.7% to $51.29 per barrel. Comex gold slid 0.2% and remains below $1,300 at $1,291.70 per ounce.

The 10-year German bund and British gilt yields are two basis points firmer, and their Japanese counterpart edged up one basis point.

Turkey’s current account deficit of $1.237 billion in August was 76% narrower than the July deficit and much smaller than forecast, which lent support to the recently beleaguered lira.

CPI inflation accelerated to 1.8% last month in both Spain and Romania.

Core private domestic machinery orders in Japan jumped 3.4% in August following an even bigger 8.0% advance in July. The August level was 4.4% greater than a year earlier. Public-sector and foreign machinery orders recorded large on-month increases of 17.8% and 11.5%, respectively, in August. Likewise, machine tool orders in September were 45.3% higher than a year earlier, up from 12-month increases of 36.2% in August and 28.0% in July.

Consumer confidence in Australia according to the Westpac measure climbed 3.6% in September after a 2.5% increase in August and a 1.2% drop in July.

U.S. data releases today of the Labor Department’s JOLTS index and weekly oil inventories may be overshadowed by the publication of minutes from the Federal Open Market Committee’s last policy review.

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

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