Firmer Share Prices, Commodity Prices and Dollar
February 8, 2021
U.S. share prices point to a 0.3-0.4% additional rise at today’s open. Equities earlier had climbed 2.1% in Japan, 1.0% in China, 0.9% in Indonesia, 0.8% in Singapore and 0.6% in Australia. European gains so far today amount to 0.7% in France, 1.0% in the U.K., 0.5% in Switzerland, 0.3% in Germany and 1.6% in Italy after Mario Draghi received the support of two other parties to form a new coalition government.
The prices of WTI oil and gold on the Comex are 1.2% and 0.5% higher.
The dollar has strengthened 0.4% versus the kiwi, yuan and sterling and 0.2% relative the euro, yen, Swiss franc and Australian dollar. Covid cases and deaths have receded but remain high relative to the peaks in earlier waves of the pandemic. Optimism that a $1.9 trillion U.S. fiscal pandemic relief package will be approved around mid-March is outflanking attention to the second Trump impeachment trial, which begins tomorrow.
Today is only the start of the sixth week of 2021, yet 10-year sovereign debt yields since the end of 2020 have already climbed 31 basis points in Great Britain, 28 bps in the United States, 16 bps in Germany and 5 bps in Japan. There has been a daily 2-basis point increase today in France, Spain, the Netherlands, Germany and United States.
German industrial production was flat in December, its first failure to increase since April, and there was a 1.0% drop compared to the final month of 2019. Industrial output hasn’t recorded a year-on-year advance since October of 2018.
With Brexit now fully in place, Ireland’s construction purchasing managers index tumbled to a reading of 21.1 in January from 52.3 in December and a 15-month high of 53.5 in November. January’s reading was the lowest since 19.9 last May.
Japan’s current economy watchers index slipped 3.1 index points to an 8-month low of 31.2 in January. Such had crested at 43.8 in November. The economy watchers outlook index, in contrast, improved to a 2-month high of 39.9. Japanese bank lending posted on-year growth of 6.1% in January.
Reflecting a 13.5% on-year drop in imports against a 0.3% rise in goods exports, Japan’s current account surplus in December of 1.166 trillion yen 114% wider than its JPY 545 billion level a year earlier. But the full-2020 surplus of JPY 17.7 trillion was 13.8% smaller than in 2019.
Spanish and Czech industrial production levels in December were respectively 0.6% lower and 0.5% greater than their year-earlier-levels. Malaysian industrial output, by comparison was 1.7% above its year-earlier level despite a 1.5 percentage point rise of the jobless rate to 4.8% there. Danish industrial production likewise was 2.5% higher than in December 2019.
Investor sentiment toward the euro area according to the monthly Sentix index fell from an 11-month high of +1.3 in January to a 2-month low of 0.2 this month. A reading of -2.7 in December had been the tenth sub-zero score in a row.
Mexican consumer confidence rose to a 10-month high of 38.4 in January. Indonesian consumer sentiment printed at a 3-month low last month of 89.9 and well down from 117.7 last February before the pandemic.
Denmark’s current account surplus of DKK 170.8 billion last year was 17.4% smaller than in 2019.
Chinese international reserves rose $6 billion in January to 3.211 trillion dollars.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German industrial production, Japanese current account, Mario Draghi, U.S. fiscal legislation