Marking Time Amid an Eclectic Assortment of Data Reports

August 26, 2020

There’s been no dominant market theme Wednesday. Investors await the virtual Jackson Hole central banker symposium that kicks off tomorrow with a widely awaited speech from Fed Chairman Powell. The RNC provided more red meat to the pro-Trump faithful on its second night. Optimism persists that the United States and China will avoid all-out trade war, and the trend of new coronavirus cases in the United States is slowing even as the daily death count continues to exceed 1000.

The dollar touched a 7-month low against the Chinese yuan after slipping below 6.90 but climbed to yet another all-time high versus the Turkish lira. Other dollar movements overnight saw the dollar rise 0.2% relative to the euro and Swiss franc but falter 0.2% versus the yen, Aussie dollar, and kiwi.

Japan’s Nikkei-225 closed unchanged. Share prices fell back 1.3% in China and 0.7% in Singapore and Australia but rise 0.6% in India. Stock markets are up fractionally so far in Germany, France, Switzerland and Italy but off 0.2% in Great Britain.

Ten-year sovereign debt yields rose two basis points each in Great Britain, Germany and the United States as well as a single basis point in Japan.

There’s been little overnight changes in the prices of WTI oil (-0.4%) and gold (+0.1%).

Record GDP contractions were experienced last quarter in Mexico of 17.1% versus 1Q and 18.7% on year. The was the fifth consecutive quarter without a rise in GDP.

French consumer confidence stayed unchanged this month with a reading of 94. That’s just a single point above this year’s low reached in May.

South Korean business sentiment rose 9 index points to a 7-month high of +66 in August, having bottomed at 49 in May and begun the year with a reading of 76 back in January.

Singapore industrial production in July was 8.4% less than a year earlier, constituting its greatest 12-month drop since November 2019. Thai industrial production sank even farther, that is by 14.69%, which was the 16th straight year-on-year decline in a row although the smallest since March.

Investor sentiment toward Switzerland rose from a reading of 42.4 in July to a 2-month high of 45.6 in August, according to the ZEW expectations gauge.

Danish retail sales continued to revive briskly as lockdown restrictions eased. Such rose 6.0% on month and 6.8% on year in July.

Norwegian unemployment of 5.2% in the three months to July was the most since at least 1997.

Japan’s June index of leading economic indicators  was revised downward by 0.6 points to 84.4 but still represents a 3-month high. The trend in the index of coincident economic indicators has been “worsening” for eleven straight months.

Japanese corporate service price inflation accelerated 0.3 percentage points in July to a 4-month high of 1.2%.

Construction completions in Australia during the second quarter dropped 0.7% relative to the prior quarter and by 2.2% versus a year earlier.

Due to an 18% plunge in New Zealand imports, its trade balance swung from a NZD 732 million deficit in July 2019 to a surplus last month of NZD 282 million.

Hong Kong experienced a HKD 205 billion trade deficit in January-July, with imports and exports dropping by 8.5% and 6.3% relative to year-earlier levels.

A 1.3% monthly leap in South African consumer prices in July was the most in 53 months. That lifted year-on-year inflation by a full percentage point to a 4-month high of 3.2%.

The Central Bank of Iceland’s 7-day deposit rate was kept at a record low of 1.0% by the Monetary Policy Committee after its latest scheduled policy review. The rate had been 3% at the beginning of 2020 but lowered by 25 basis points in February, 50 bps on each of two occasions during March, and by 75 bps in May. Inflation has risen to 3%, reflecting in part the krona’s 12% depreciation during the pandemic. But according to a released statement, inflation should respond to excess slack in the economy and settle back to 2% next year. The projected drop of GDP this year was revised downward by a percentage point to 7% because personal consumption has not been as soft as assumed previously.

Just in: U.S. durable goods orders in July jumped 11.2%, nearly triple analyst expectations, but core non-defense orders excluding aircraft went up only half as much (1.9%) as in the prior month. Total durable goods orders were still 5.0% lower than in July 2019.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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