Slightly Softer Dollar Ahead of the Start of Trump Impeachment Trial
February 9, 2021
The dollar lost 0.4% in trade-weighted terms and is also down 0.6% against traditional hard currencies like the euro, yen and Swiss franc. The value of a bitcoin advanced to yet another record high of $48,000. Dollar weakness extends to many commodity-sensitive currencies and to gold, which is 0.6% firmer.
Day one of the Trump trial will begin shortly after noon and initially consider the constitutionality of impeaching someone, who has already left political office. That hurdle is expected to be overcome, enabling the senate to move on to the substance of former President Trump’s alleged guilt in inciting the January 6th storming of the Capitol and intent to overturn the election by whatever means necessary.
This has been a light day from a data release standpoint.
The ten-year U.S. Treasury yield took two basis point steps backward, while other sovereign debt yields are steady. WTI oil is steady, too.
Pacific Rim equities were mixed in today’s session, with gains of 2.0% in China, 0.6% in Taiwan, 0.4% in JapanĀ and 0.3% in Hong Kong but losses of 1.2% in New Zealand, 0.9% in Australia, and 0.4% in Indonesia. Share prices settled back 1.0% in Spain and are down 0.4% in Germany and Italy while holding flat in the U.K. and in U.S. futures.
New bank lending in China totaled a record monthly high of 3.58 trillion yuan in January after being 16.7% greater in 2020 than in 2019. But on-year growth in M2 money (9.4%) was down from 10.1% in the prior month and the smallest 12-month increase since last July.
The stock of Japanese M2 money also advanced 9.4% on year in January, which compares with increases of 6.5% in 2020 and 2.4% in 2019. Japanese machine tool orders recorded on-year growth of 9.7% in January after 9.9% in December. December had culminated a string of seven consecutive months in which machine tool orders data had improved following a record on-year drop of 52.8% last May. Finally, Japanese labor cash earnings posted a nominal 3.2% decline between December 2019 and December 2020.
Germany’s current account surplus in December of EUR 28.2 billion was the biggest in 21 months. The 2020 surplus (EUR 236.2 billion) was just EUR 8.6 billion less than in 2019, as a EUR 21.4 billion improvement in services trade offset part of an even larger decline in the goods trade surplus, which had occurred mainly in the second quarter of last year.
Italian industrial production in December recorded its third monthly decline in the last third of 2020, resulting in a 2.0% year-on-year drop from December 2019. Greek industrial output in the last month of 2020 was 2.3% greater than a year earlier, by contrast.
British same-store sales growth rebounded to 7.1% in January after dipping to 4.8% in December.
Consumer confidence in Norway rose to a 3-quarter high in the first quarter of 2021 but remained 8.7 index points weaker than its year-earlier level.
Brazilian consumer price inflation of 4.56% in January represents a 20-month high. Mexican CPI inflation rose above December’s 7-month low of 3.15% to a 3-month high of 3.54%.
Malaysian retail sales were fewer than a year earlier in each month of the final quarter of last year. Indonesian retail sales ended last year 19.2% below the December 2019 level.
Small business sentiment in the United States deteriorated to an eight-month low in January.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German current account, second Trump impeachment trial, U.S. small business investment