Quiet Monday, Steady Dollar
September 17, 2012
The dollar is unchanged on net from Friday closing levels against the yen, loonie, Swiss franc and kiwi. The greenback has risen 0.2% against the Aussie dollar and 0.1% versus the yuan and euro, but it is 0.1% softer relative to sterling.
Chinese equities slumped 2.5% on concern over limited scope for monetary policy to be eased. The heir apparent to Chinese Communist Party leadership, Xi Jinping, returned to public view after a mysterious absence over the past two weeks.
Japan was closed for the observance of Respect for the Aged Day holiday. In other Pacific Rim stock markets, share prices rose 0.7% in New Zealand, 0.4% in India, and 0.3% in Singapore, Australia, and Taiwan. South Korean equities fell by 0.3%. In European trading, shares fell so far by 1.1% in Italy, 0.7% in Spain, 0.5% in France, 0.3% in Britain, and 0.2% in Germany.
Ten-year British gilts and German bunds settled back by four and two basis points after last week’s gains.
Commodities are steady. Gold is unchanged at $1773.30 per ounce, and oil is down just 0.1% at $98.95 per barrel.
The Reserve Bank of India (RBI) cut the cash reserve requirement to 4.5% from 4.75% but left its key repo and reverse repo rates unchanged at 8% and 7%, the levels since a 50-basis point cut in April. Policy remains focused on containing inflation.
Labor cost inflation in the euro area ticked up a tenth percentage point to an on-year rise of 1.6% in the second quarter but remained will below the 2.4% increase in the year to 2Q11.
Euroland posted a seasonally adjusted EUR 9.7 billion current account surplus in July, which was more or less in line with forecasts. The January-July surplus of EUR 62.9 billion was equal to about 0.7% of GDP, a 0.9 percentage point favorable swing compared to the first seven months of 2011.
Euroland’s trade surplus printed in July at EUR 7.9 billion seasonally adjusted after surpluses of EUR 9.3 billion in June and EUR 6.7 billion in May. The unadjusted EUR 15.6 billion trade surplus was well above that of EUR 2.1 billion in July 2011.
Australian motor vehicle sales increased 3.6% in August, surprising analysts who anticipated a slight dip. New Zealand consumer confidence improved 2.6% in the third quarter of 2012.
New Zealand’s services diffusion index weakened to 50.0 in August from 52.4 in July, 54.3 in June and 56.6 in May. Turkish consumer sentiment, in contrast, fell 1.8% to a reading of 91.1 in August from 92.8 in July. Turkish unemployment of 8.9% in June was marginally lower than 9.0% in May and also less than 10.2% in June 2011. Singapore’s SGD 3.46 billion trade surplus in August was near identical in size to the month before.
The British Rightmove house price index posted a third straight monthly decline in September, albeit by just 0.6% after tumbles of 1.7% in July and 2.4% in August. Property prices were 0.7% higher than a year earlier.
Czech PPI inflation accelerated to 1.9% in August from 1.3% in July. Danish PPI inflation also picked up in August, climbing 2 percentage points to 3.2%. But Icelandic CPI inflation slowed to 4.5% last month from 5.4% in July.
Italy’s recorded a EUR 4.49 billion trade surplus in July, 78.5% wider than in June. Norway’s trade surplus widened 11.6% to NOK 33.8 billion between July and August. The Netherlands had a current account surplus in 2Q of EUR 11.2 billion, some 35% smaller than in the first quarter.
The Empire State manufacturing index and Canadian securities transactions figures arrive at 12:30 GMT (08:30 local time). Anti-U.S. protests in the Middle East continue to thrust foreign policy into the forefront in what had been a U.S. election campaign devoted almost entirely to the economy.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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