Market Catches Breath After Volatile Thursday

September 26, 2014

Overnight dollar movements amount to no net change against the euro, Swissie, sterling and kiwi, a gain of 0.3% versus the yen and 0.1% against the yuan and a dip of 0.1% relative to the Canadian and Australian dollars.

Share prices in Europe rebounded 0.7% in France and Italy and 0.5% in Spain.  Stocks are unchanged in Germany and Switzerland and down 0.1% in Britain.

Earlier in the Pacific Rim, equities got whacked 1.3% in Indonesia and Australia, and 0.9% in Japan.  Smaller drops occurred of 0.5% in New Zealand, 0.4% in Hong Kong, 0.2% in Taiwan and 0.1% in South Korea, while the markets in China and Singapore closed flat.

WTI oil firmed 0.3% to $92.77 per barrel.  Comex gold edged up 0.1% to $1,223.30 per ounce.

The 10-year German bund and Japanese JGB yields slid a basis point each, while the 10-year Japanese JGB is steady at 0.51%.

Japanese CPI inflation in August of 3.3% was down from 3.4% in July and 3.7% in May.  Core inflation of 3.1% has receded 0.3 percentage points from a three-decade high of 3.4% in May.  Bear in mind that roughly 2.2 percentage points of these figures stems directly from the April sales tax hike.  Tokyo consumer prices rose merely 0.4% at an annualized pace during the third quarter.

Japanese stock and bond transactions generated a JPY 121 billion net capital outflow last week versus a 1.11 trillion inflow in the week of September 13.

According to the Conference Board, China’s index of leading economic indicators went up 0.7% last month, the smallest rise since May after gains of 1.3% in June and 1.2% in July.  The index of coincident economic indicators stagnated in August following gains of 0.9% in June and 1.0% in July.

Euroland’s index of leading economic indicators plunged 0.6% in August following a 0.3% rise in July.  Its index of coincident economic indicators edged up by 0.1% in each of those months.

French consumer confidence registered an 86 reading in September for a fourth straight month. 

The German consumer sentiment index slid to 8.3 in October from 8.6 in September and 8.9 in both July and August.

Italian business sentiment fell 0.3 points to 95.1 in September.  Analysts had expected no significant change.

German import prices dipped 0.1% in August, resulting in a somewhat larger 12-month decline of 1.9%.  The import price index firmed 0.3% on month excluding energy and recorded a 0.1% on-year dip on such a basis.  German export prices were unchanged on month and 0.1% softer on year.

Sweden’s trade balance weakened SEK 5.2 billion from a SEK 2.4 billion surplus in July to a SEK 2.8 billion deficit in August.

Industrial production in Singapore fell short of expectations for the month of August, dipping 0.2% on month but rising 4.2% on year.

There was no change in South Korean consumer confidence this month.

Today’s U.S. data releases — revised 2Q GDP and the final September reading of the U. Michigan/Reuters gauge of consumer sentiment — have the potential to shake markets out of their morning pause.  The predispositions lately have been to avoid risk and buy the dollar.  Colombia’s central bank reveals its latest interest rate decision.

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

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