Dollar Firms a Bit

February 4, 2019

Several markets including China, Hong Kong, Taiwan, South Korea and Singapore are shut for the Lunar New Year holiday.

Half the U.S. government shutdown reprieve has been spent, and still there is no agreement. U.S./Chinese trade talks are another continuing source of uncertainty.

The dollar is 0.2-0.4% firmer against the euro, Swiss franc, loonie, Aussie dollar, kiwi, and sterling. There’s been a slightly less 0.1% overnight gain against the yen and no change relative to the peso.

Ten-year sovereign debt yields are up 3 basis points in the United States and a basis point each in Japan and Great Britain.

But share prices have slipped 0.9% in Spain, 0.6% in France, and 0.3% in Germany and India. Net movement in the DOW has been negligible.

Gold climbed 0.6%, while oil dropped 1.9%.

China’s Caixin-compiled purchasing manager indices for service-sector activity dropped 0.3 index points to a 3-month low. The composite PMI also slid to a 3-month low in January.

Malaysia’s manufacturing PMI recorded a fourth straight sub-50 reading, a 22-month low of 47.9.

Singapore’s SBR manufacturing PMI dropped 0.4 points to 50.7, signaling the weakest, albeit positive, growth since mid-2017.

Britain’s construction purchasing managers index fell 2.2 points to just 50.6 in January. Such was its lowest reading since March 2018, when snow had distorted the result.

The Sentix gauge of investor sentiment toward the euro area economy recorded a third straight negative reading in February and, at -3.7, was the sixth consecutive month to show incremental deterioration. The reading last August was +14.7.

Producer prices posted an 0.8% month-on-month decline in December, thanks to a 2.6% plunge in the energy component but complemented by a 0.1% collective downtick in all other producer prices. On-year PPI inflation slowed to 3.0% from 4.0% in November and 4.9% in October.

Italian CPI inflation slowed to a 9-month low of 0.9% in January.

Turkish CPI inflation edged marginally higher in January and, at 20.35%, was the fifth straight month for such to surpass 20.0%. Producer prices in Turkey exceeded year-earlier levels by 32.9%.

Over the twelve months through January, consumer prices rose just 0.3%, and producer prices fell by 1.1%.

Romanian PPI inflation dropped 0.4 percentage points to 4.5% in December.

On-year growth in Japan’s monetary base of 4.7% in January was down from 5.6% in the fourth quarter of 2018 and 7.3% in all of 2018 on average.

In the year to December, building permits rose 6.1% in New Zealand but declined 22.5% in Australia.

Disappointing U.S. data just came out. Factory¬† orders dropped by a greater-than-forecast 0.6% in November on top of a 2.1% plunge in October, and the New York regional PMI fell 2.0 points to a 7-month low of 63.4. That’s down from a 2018 high of 76.5 in August.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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