Markets Continue to React to Friday’s Good U.S. Jobs Report

March 12, 2018

Equity markets made broad gains in the Pacific Rim, advancing 2.0% in Hong Kong, 1.8% in India, 1.7% in Japan, 1.6% in Singapore, 1.3% in Taiwan, 1.1% in Indonesia and New Zealand, 1.0% in South Korea, and 0.6% in China and Australia. Likewise, stocks are up 1.8% in Greece, 0.7% in Germany, 0.6% in Spain, 0.5% in Italy and Switzerland, and 0.3% in France. The British Ftse is unchanged thus far, however.

Commodity prices have dropped. Copper (-0.8%), gold (-0.5%) and oil (also -0.5%) are down.

Ten-year sovereign debt yields are little changed from last week’s closing levels.

The dollar has slipped 0.3% against the yen and kiwi, 0.2% versus the Australian dollar, and 0.1% vis-a-vis the Swiss franc, Chinese yuan and sterling. The loonie and euro are unchanged against the dollar. The peso has firmed marginally.

The Japanese Ministry of Finance reported results of its business outlook survey. Business conditions among all large firms dropped to a reading of 3.3 this quarter from 6.2 in the final quarter of 2017, led by a slump in manufacturers to 2.9 from 9.7 but reinforced but a slightly lower reading among non-manufacturers. A further slide is anticipated next quarter before a rebound in 3Q18.

Japanese Finance Minister Aso, who has been embroiled in a corruption scandal favoring a friend of the prime minister’s wife, says he will not stand down. This nudged the yen a little higher.

A 39.5% on-year increase in Japanese machine tool orders in February was the smallest 12-month advance since August.

Australia observed a Labour Day holiday in the Australian states of Victoria and Tasmania.

Retail sales in Singapore posted a sharp 8.4% on-year drop in January that was related to the Chinese Lunar New Year holiday.

Ireland’s construction purchasing managers index settled back 1.2 points to 59.2, which nonetheless conveyed the second strongest rate of growth since May of 2017.

Danish CPI inflation last month of merely 0.6% constituted an 8-month low.

Denmark’s January current account surplus of DKK 7.279 billion was the smallest surplus since March 2017 and down from DKK 12.4 billion in January of last year.

Turkey recorded a $7.096 billion current account deficit in January.

Greek industrial production was 1.7% lower in February than a year earlier.

Portuguese CPI inflation slowed to 0.6% in February from 1.0% in January. The Portuguese trade deficit of EUR 1.249 billion in January was a bit narrower than December’s EUR 1.404 billion shortfall.

The monthly U.S. federal budget deficit will be revealed later today.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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