Marking Time Ahead of U.S. Data Releases

March 16, 2012

Net overnight movement in the dollar has been confined to rises of 0.2% against the yen and 0.1% versus the loonie, Swissie, and euro and declines of 0.2% against the yuan and 0.1% relative to sterling and the Aussie and New Zealand dollars.

Share prices have been mixed.  Stocks recovered 1.5% in China and also rose by 1.6% in Thailand and 1.0% in Sri Lanka, but declines were recorded of 1.2% in India, 0.8% in New Zealand and Taiwan, and 0.5% in South Korea, Singapore and Malaysia.  Japan’s Nikkei edged up 0.1%, and the German Dax has also risen that amount so far.  The British Ftse is up 0.3%, while the Paris Cac, like the Australian market earlier, shows no change.

The main action of this week has been the tumble in sovereign debt prices (with a commensurate jump in yields), but changes today have been reasonably limited.  It’s too early, however, to suggest a new equilibrium, and North American data later in the day could generate livelier action.  Ten-year Treasury futures (2.30%) are 29 basis point higher than a week ago.  German bunds are up just one basis point today but 18 bps from a week ago.  British gilts firmed two basis points and 24 bps from this time on Friday March 9.  The JGB is unchanged on the day and six bps higher on the week.

Gold prices slid 0.6% today to $1649.70 per ounce.  Oil is 0.4% stronger at $105.50 per barrel.  Copper and silver prices are somewhat softer.

Minutes from the Bank of Japan’s Board meeting of February 13-14 revealed wide approval of the asset purchase plan extension that the committee decided to do then.  Members imagined lower growth in fiscal 2012 than what they had projected last October.

Japan’s January index of leading economic indicators was revised down by 0.5 points to 94.4.  That figure still surpassed readings of 93.3 in December and 93.0 in November.  The coincident index was revised to 92.7 from 93.1 and was thus weaker than December’s 93.0.  The lagging index of 83.8 was also below the score in December of 86.3.

South Korea’s index of leading economic indicators was unchanged in January.  Import and export prices in January were 2.1% and 5.2% above a year earlier.

The Bank of Chile left its benchmark interest rate unchanged at 5.0%.  Turkish consumer confidence improved a point to 93.2 in February.

Singapore reported a larger SGD 5.6 billion trade surplus for February.  On-year growth of 30.5% in non-oil exports was nearly twice as much as expected.  The Monetary Authority of Singapore (MAS) reduced its 2012 growth forecast by a half percentage point to 2.5%.

Euroland’s seasonally adjusted EUR 5.9 billion trade surplus in January was EUR 1.5 billion smaller than December’s surplus.  Monthly import growth of 2.4% exceeded the 1.3% rise of imports.  A trade deficit of EUR 9.8 billion in 2011 was a third smaller than the 2010 deficit and reflected 12-13% growth in both exports and imports.  The largest 2011 bilateral trade imbalances were deficits of EUR 101.2 billion with China and EUR 57.7 billion with Russia and surpluses of EUR 58.3 billion and EUR 47.1 billion with the United States and Britain.  A EUR 13.1 billion deficit was generated in 2011 by trade with Japan.

Spain’s index of leading economic indicators rose 0.3% in January.  Italy’s current account deficit in January of EUR 7.95 billion was 8.6% smaller than the gap a year earlier.

Richmond Fed President Lacker has dissented openly in public from the U.S. central bank’s interest rate guidance, saying that he foresees a hike in the federal funds target occurring next year, well before late 2014. 

Scheduled North American economic indicators being released today feature U.S. industrial production, the U. Michigan consumer sentiment index, and monthly consumer prices.  Canada will report its monthly survey of manufacturing shipments, orders, and inventories, while the Bank of Mexico announces its latest interest rate decision.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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