Awaiting U.S. Jobs Report and the Kavanaugh Vote and Watching Sino-U.S. Trade Dispute Intensify
October 5, 2018
Wednesday’s ADP estimate of private employment growth and very low jobless insurance claims suggest a very large jump in U.S. non-farm payroll jobs. The Labor Dept announces the figure at 08:30 EDT.
A cloture procedural vote on the Kavanaugh debate mid-day should set the stage for a a full senate confirmation vote Saturday. Best guess is that he’ll probably get confirmed.
China’s stock market has been closed all week, but that hasn’t stopped other Pacific Rim share prices from declining. Equities fell overnight by 2.3% in India, 1.9% in Taiwan, 0.8% in Japan, 0.7% in Singapore, and 0.4% in Hong Kong, New Zealand, and Indonesia.
Besides fear that the U.S.-Chinese trade dispute is about to mushroom, stocks have been depressed by climbing long term interest rates around the world. Ten-year sovereign debt yields today are 9 basis points higher in Italy, 4 bps higher in Greece, and 2 bps higher in France, Germany, The Netherlands and the United States than yesterday. Share prices in Europe are thus far down 1.5% in Greece, 1.2% in Italy, 0.6% in Germany, 0.5% in the U.K. and Spain, and 0.4% in France.
Comex gold and WTI oil prices have risen 0.4% and 0.3% today.
The dollar has risen 0.6% and 0.5% versus the Aussie dollar and kiwi and is up 0.3% relative to the peso. The dollar edged up 0.1% against the euro and Swissie and down 0.1% vis-a-vis the yen and sterling. The loonie is flat.
A 3.1% on-year advance of German producer prices in August was 0.2 percentage points more than in June and July and the greatest 12-month increase in the past 11 months.
German industrial orders rebounded by a greater-than-anticipated 2.0% in August following month-on-month drops of 3.9% in June and 0.9% in May. This first upturn since May happened in spite of a 2.8% slid in domestic demand. Export orders rose 5.8%, and total orders were still 2.1% lower than in August 2017.
The French current account swung back to a deficit of EUR 5.632 billion in August from a EUR 0.324 billion surplus in July. June had seen a EUR 6.11 billion deficit.
Italian retail sales rose 0.7% on month in August and 2.2% on year after a 0.5% July-over-July decline.
Swiss CPI inflation slid to a 4-month low of 1.0% in September. Core inflation was 0.4%.
Britain’s Halifax house price index revealed a 2.5% on-year increase in September, a 3-month low and down from an on-year advance of 3.7% in August. British unit labor costs were 2.0% higher than a year earlier in the second quarter, which was the lowest pace since a 0.6% on-year advance through the third quarter of 2017.
Industrial production around Europe in August compared to a year earlier rose 13.5% in Ireland, 4.5% in Hungary, and 1.2% in Spain but dropped 4.4% in Denmark.
Austrian wholesale price inflation slowed to 4.8% last month from 5.4% in August.
House price inflation in the euro area returned to 4.3% in the second quarter after rising 0.2 percentage points to 4.5% in the first quarter.
Japanese real household spending growth quickened in August to a 2.8% 12-month rate of increase, but real income and real disposable income posted on-year declines of 0.6% and 0.9%. Japanese international reserves rose $368 million last month but showed a year-to-date decline of $4.61 billion to $1.260 trillion. On-year growth in Japanese labor cash earnings settled back to 0.4% in August and showed a 0.6% drop when adjusted for inflation. Finally, Japan’s index of leading economic indicators bounced up 0.5% to a 2-month high in August. The index of coincident economic indicators was at a 4-month high and elicited a trend designation of “improving” from officials for a 23rd straight time.
Australian retail sales rose 0.3% in August following no change in July, and that lifted the 12-month increase to 3.2% from 3.0%. The Australian Performance of Construction index fell 2.5 points and slipped below 50 for the first time since January 2017, indicating outright contraction.
Policymakers at the Reserve Bank of India surprised pundits by not raising its interest rates for a third time since June. The benchmark rate stays at 6.5% and is flanked by a 6.25% reverse repo rate and a 6.75% marginal lending facility rate. Officials had raised rates by 25 basis points in both August and June (marking the first tightening since early 2014). A statement from India’s central bank revised forecasts lower marginally lower for both inflation and growth. ” The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 per cent on a durable basis.”
Canada as well as the United States will be reporting both monthly labor statistics and trade figures shortly.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: French current account, German factory orders, German PPI, Kavanaugh