Little Change in the Dollar Ahead of U.S. Data

May 27, 2014

The dollar was narrowly mixed overnight, with gains of 0.2% against the yuan and 0.1% relative to the kiwi, Swissie and sterling, no change versus the yen and euro and dips of 0.2% vis-a-vis the Australia and dollar and 0.1% relative to the Canadian dollar.

There is a busy U.S. data release calendar this Tuesday, which includes the Dallas and Richmond Fed manufacturing indices, durable goods orders, Markit Economics’ estimated service-sector PMI, the Case Shiller and FHFA home price indices, and the Conference Board’s consumer confidence index.

Share prices in the Pacific Rim fell 0.7% in India, 0.6% in South Korea, 0.4% in China, 0.3% in Singapore, 0.2% in New Zealand, and 0.1% in Hong Kong but rose 02% in Japan and Taiwan.  In Europe, equities show gains of 0.5% in Britain and 0.3% in Germany, Spain and Italy.

Ten-year British gilt and Japanese JGB yields are three and one basis points higher, while the German bund is steady.  Peripheral yields are lower.  EU parliamentary elections seem to give a mandate for more stimulative fiscal policies.

Japanese corporate service prices leaped 2.4% on month due to April’s 3-percentage point consumption tax hike.  The 12-month rate of increase accelerated from 0.7% in March and 1Q14 to 3.4%.  On-year CSP inflation excluding the tax effect was 0.8%, however.

Japan’s small business sentiment index rose above April’s 15-month low, printing 1.2 points higher at 46.6 but remaining well below March’s reading of 53.5.  While non-manufacturing recovered 2.5 points to 47.7, manufacturing dropped another 0.6 points to 45.1, according to Shoko Chukin Bank which compiles the index.

Several countries reported consumer confidence.

  • French consumer sentiment stayed at 85 in May, same as in April and the fourth such reading in six months.
  • Italian consumer confidence improved 0.8 points to a 52-month peak of 106.5.
  • South Korean consumer sentiment fell more than expected to 105 in May after readings of 108 in both March and April.
  • From a 2-year high in April, Turkish consumer confidence dropped back 2.5 points to 76.0.
  • Finnish consumer sentiment rose 5 points to 8.7, but manufacturing confidence stayed at minus six in May.

The Swiss trade surplus widened 23.3% on month to CHF 2.43 billion in April.  Hong Kong’s trade deficit grew 9.8% in the same span to HKD 55.3 billion.  The Filipino trade shortfall in March of $146 million like February’s $131 million was considerably less than January’s deficit of $1.38 billion.

South African GDP contracted 0.6% last quarter and was only 1.6% greater than in the first quarter of 2013.  The South African index of leading economic indicators slid 0.5% in March.

The service sector survey done by Britain’s Confederation of British Industries revealed the greatest business optimism since at least the first such survey in November 1998.

The British Bankers Association noted a drop in mortgage applications to 42,173 in April from 45,045 in March.

Hungary’s central bank is expected to announced another 10-basis point cut of its interest rate today.  A central bank monetary policy announcement is also scheduled in Brazil.

As noted above, several U.S. indicators get reported today.  Lockhart of the Fed speaks publicly, and so does Bank of Japan Governor Kuroda.

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

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