Dollar Narrowly Mixed Ahead of Bernanke Breakfast Speech
October 15, 2010
The dollar is up 0.2% against the kiwi and loonie, up 0.1% against the Swiss franc, unchanged relative to the euro and Australian dollar, down 0.1% against the yuan, and 0.3% weaker against the yen and sterling. Aside from the speeches by Bernanke, Lockhart and former Fed Vice Chairman Kohn, the United States will be releasing consumer prices, retail sales, the Empire State manufacturing index, business inventories, and the preliminary U. Michigan index of consumer sentiment. Canada’s monthly survey of manufacturing sales, orders and inventories and data on auto sales arrive as well.
Currency strains persist between Japan and Korea. The U.S. Treasury reports on currency market conditions today. Stark of the ECB said current central bank policy is appropriate.
Equities in the Pacific Rim fell by 1.8% in India, 0.9% in Japan, 0.6% in Indonesia, 0.4% in Hong Kong, Malaysia and the Philippines and 0.2% in Australia and New Zealand. Stocks formed 3.2% in China, 0.4% in Thailand and Pakistan, and 0.3% in Singapore. The German Dax and Paris Cac have traded 0.3% higher in Europe, but the British Ftse is off 0.2%.
Ten-year German bund and British gilt yields rose three basis points, while the JGB yield is unchanged in Japan.
Oil prices are steady at $82.69 per barrel, while gold edged up 0.1% to $1379.10 per ounce. Opec oil ministers in Vienna agreed to retain a supply quota of marginally less than 25 million bpd, which has been in effect for the past two years. The group next meets in December in Ecuador.
The Bank of Japan’s quarterly report on regional economic conditions says that a moderate recovery continues but downgraded the outlook for a third of Japan’s nine regions. The pace of recovery has slowed in two regions.
Japanese industrial production in August was revised to a drop of 0.5% from minus 0.3% reported initially. Output was still 15.1% greater than a year earlier, but the July-August level was 1.2% lower than the second-quarter mean. Shipments also got revised downward. Capacity usage fell 0.9% in August, while capacity expanded 0.4%.
Consumer prices in the euro area rose 0.2% in September and recorded a 12-month 1.8% rate of rise. The CPI had dropped 0.3% in the prior twelve months to September 2009. Core inflation, however, stayed at 1.0%, same as in July and August and down from 1.2% in the year to September 2009. Energy prices rose 7.7% in the latest statement year after dropping by 11.0% in the year to September 2009. Energy also recorded a 0.3% monthly increase.
The euro area posted a fourth consecutive seasonally adjusted trade deficit in August. Its size was EUR 1.4 billion. The unadjusted January-August balance showed a deficit of EUR 3.2 billion versus a surplus of EUR 6.2 billion a year earlier. Exports increased 1.0% on month in seasonally adjusted terms. That was the third advance in four months. Between April and August, exports climbed 26.3% at an annualized rate.
Final Italian consumer price data for September confirmed the earlier figures of down 0.2% on month but up 1.6% on year. Austrian consumer prices firmed 0.4% in September and 1.9% from a year earlier. Danish producer prices climbed 0.4% last month and by 5.5% from a year earlier. Czech producer prices rose 0.3% on month and 2.4% on year in August.
Norway’s trade surplus of NOK 23.5 billion in September was 9% wider than a year earlier. Exports rose by 7.9%. Italy recorded a EUR 3.26 billion trade deficit in August of which EUR 2.13 billion was against non-EU economies. Finland posted surpluses in August of EUR 450 million in the current account and EUR 197 million in merchandise trade.
Spain’s index of leading economic indicators rose 0.6% in August, twice as much as the gain in July.
Car sales in the European Union posted a sixth straight monthly drop in September. Such were down 9.6% in the latest month and off by 4.3% in January-September from a year earlier.
Swedish house prices rose 1.0% last quarter and by 6% between 3Q09 and 3Q10. Spanish house prices fell 0.9% last quarter and by 3.4% from a year earlier.
The Bank of Mexico holds a policy meeting but is not expected to change its key interest rate today. Chile’s central bank tightened late Thursday.
Most likely, Fed Chairman Bernanke will reveal nothing significant about what the FOMC might decide on November 3rd, but analysts are ending this week on a cautious footing lest he spring a surprise. Similarly, the U.S. Treasury Department is unlikely to designate China as a currency manipulator in its semi-annual forex report, which gets published today.
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
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