Dollar Broadly Lower

May 6, 2014

The dollar touched overnight lows of 1.3946 per euro, 0.9354 per Aussie dollar, 1.6980 per pound, CHF 0.8728, and JPY 101.7.  Net losses are 0.8% against the kiwi, 0.7% relative to the Australian dollar, 0.6% vis-a-vis sterling, 0.5% against the euro and Swiss franc, 0.4% versus the yen, 0.3% against the yuan and 0.2% relative to the loonie.

Japan’s Golden Week holiday period continues.  Today is the observance of Greenery Day.

Equities fell 1.3% in Hong Kong, 0.5% in New Zealand, 0.2% in Indonesia and 0.1% in South Korea but rose 0.5% in Taiwan, 0.4% in Australia and 0.3% in India.  In Europe, the German Dax is unchanged.  Stocks are up by 0.4% in Spain and 0.2% in Switzerland and Italy but off 0.1% in France.

The ten-year British gilt yield climbed four basis points, while its German counterpart is unchanged.

Gold is steady at $1,308.80 per ounce.  WTI oil edged 0.2% higher to $99.68 per barrel.

The Reserve Bank of Australia left its Official Cash Rate at a record low of 2.5%, calling the stance appropriate.  The rate was last changed in August 2013 when a 25-basis point cut was engineered.

The National Bank of Romania has continued to pause monetary policy.  The key rate was cut by 125 basis points between mid-2013 and this past February but left at 3.5% just as it had been at the prior meeting on March 28.

More data evidence of a recovering European economy surfaced.  Retail sales volume in the euro area recorded a third consecutive monthly advance, rising 0.3% in March after 0.1% in February and 1.0% in January. The first quarter-on-fourth quarter annualized advance was 2.5% after 1.8% shrinkage in the previous quarter, and March’s level was 0.9% higher than a year earlier.  Analysts had predicted that sales contracted slightly in March.

Britain’s service-sector purchasing managers index jumped another 1.1 points to a four-month high of 58.7 in April.  The composite PMI score climbed 0.9 points to 55.1, which if sustained would be consistent with second-quarter GDP expansion of 0.8% or more.

Euroland’s service-sector PMI was confirmed unchanged at the preliminary indication, 53.1, a full point higher than the March reading.  The composite Ezone PMI reading was 54.0, suggesting GDP growth of 0.5% or more not annualized.  The composite and service PMIs constitute respective 35- and 34-month highs, but indications of inflation receded further.  Within the euro area, the composite PMIs of Ireland and Spain hit 94- and 85-month peaks of 60.8 and 56.3, while the German, French and Italian composite readings were at 2-month highs of 56.1, 52.6 and 50.6.  The German service-sector PMI, 54.7, was buoyant though at a 2-month low.  The French services PMI was also at a 2-month low but worrisomely close to the 50 threshold at 50.4.

Sweden’s services PMI rebounded sharply to 57.8 in April from a 5-month low of 53.6 in March.

Spanish unemployment dropped 112K in April, over twice as much as forecast.

Private non-oil purchasing manager survey results arrived for Egypt, the U.A.E. and Saudi Arabia.  While Egypt’s reading dipped 0.3 to 49.5, such at least hinted at some stabilization in the rate of contraction.  The Saudi index increased 1.5 points to 58.5 in April, and the U.A.E. PMI, which rose to 58.3 from 57.7 in March and 57.3 in February, was accompanied by evidence of the fastest jobs growth since late 2009.

Lebanon’s PMI score of 48.5 surpassed its one-year average of 47.5 but indicated a contracting trend.

India’s services PMI rose a whole point but stayed under 50 for a second straight time at 48.5.  The composite PMI for India was at a 2-month high of 49.5.

South Africa’s private PMI fell by 0.8 points to a ten-month low of 49.4.

Australia’s trade balance recorded a fourth straight surplus in March of A$ 731 million, but its size was the smallest since December.  Exports fell 2% on month.

Filipino CPI inflation ticked up to 4.1% last month from 3.9% in March and was accompanied by a 2.9% core CPI.  Producer prices in the Philippines were just 0.5% higher in March than a year before.

A new set of forecasts from the OECD projects global GDP growth of 3.4% this year and 3.9% in 2015.  GDP in the U.S. and Euroland are projected to rise by 2.6% and 1.2% this year.

Canada and the United States report trade figures today.  Canada’s IVEY-PMI survey gets released, while other U.S. data include weekly chain store sales and the monthly IBD/TIPP Optimism index.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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