Friday Profit-Taking

March 15, 2013

The dollar and stocks are lower this Ides of March.

The dollar fell 0.5% against the yen, euro and Swiss franc but is unchanged versus the yen and yuan.  The greenback dipped 0.1% against the loonie and kiwi and firmed 0.1% relative to the Australian dollar.

Whereas Japan’s sizzling Nikkei rally was extended by 1.5%, most other equity markets suffered profit-taking, with loses of 0.8% in South Korea, 0.7% in India, 0.6% in the Philippines, and 0.4% in Hong Kong.  Another exception was a 1.8% rise in Australian equities.  In Europe, share prices are down 0.7% in Spain, 0.6% in France, 0.4% in Britain and 0.1% in Germany.

Ten-year German bunds and Japanese JGBs are unchanged.  The 10-year British gilt yield firmed a basis point.

Oil and gold edged up 0.4% and 0.1% to $93.39 per barrel and $1592.10 per ounce.

Central banks in Chile and Russia left their key interest rates unchanged.  The Bank of Chile’s rate has been at 5.0% since a 25-bp cut in January 2012, which was the first change there in over two years.  Bank Rossii’s refinancing rate was left at 8.25%. That was the sixth decision not to change such in a row.

The upper house of the Japanese Diet confirmed the nominations of Kuroda as BOJ governor and Nakaso and Iwata as the central bank’s two deputy governors.  Each of them has a five-year term.  Each wants a more stimulative monetary policy.  The new team was approved by the lower house yesterday.

EU leaders at a summit in Brussels decided to cut governments a bit more slack on meeting deficit reduction targets.  Great concern was expressed about regional unemployment especially among young workers.

Bank of England Governor Mervyn King denied that the central bank is trying to engineer a depreciation of sterling.

Ezone labor costs recorded a year-over-year advance of 1.3% last quarter, down from 1.8% in the year to 3Q12 and 2.2% in the year to 4Q11.

Consumer prices in the euro area rose 0.4% in February, but inflation settled back in year-over-year terms to an in-target 1.8% from 2.0% in Jan uary, 2.2% in November and December and 2.7% in February 2012.  Energy and food prices posted 12-month rises of 3.9% and 2.7%, while core inflation held steady at 1.3%.

Switzerland’s combined producer price/import price index rose by a less-than-forecast 0.1% in February.  Such was also 0.1% higher than a year earlier.  Domestic producer prices were unchanged from January.

Britain’s index of leading economic indicators rose 0.4% last month, while its index of coincident indicators dipped 0.1%.

New Zealand’s business purchasing managers index rose 1.1 points to print at 56.3 in February, reflecting a very respectable level of positive growth.

Retail sales in Singapore fell 1.4% on month in January and by 2.0% from a year earlier.  Chinese foreign direct investment was 7.3% lower than a year earlier in February.

Czech industrial production was 4.1% lower than a year earlier in January. Norway’s trade surplus widened marginally to NOK 33.65 billion in February.  Finland’s current account deficit narrowed to EUR 430 million in January from EUR 616 million the month before.  The Portuguese current account deficit dropped sharply to EUR 14.4 million from December’s EUR 43.1 million.

Several U.S. economic data releases are on tap today: consumer prices, industrial production and capacity usage, the TIC Treasury Department capital flow statistics, the Empire State manufacturing index, and the Reuters/U. Michigan index of consumer sentiment.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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