Weak European Data and Unrest in Hong Kong

September 29, 2014

The dollar hit new highs for the move against the kiwi of USD 0.7708, Australian dollar of USD 0.8664, Swiss franc of 0.9534, Canadian dollar of 1.1180, yen of 109.76, and euro of USD 1.2664.  On balance, the dollar has risen 1.3% against the kiwi, 0.4% versus the Aussie dollar, 0.2% relative to the yuan and sterling, and 0.1% vis-a-vis the yen.  The greenback is unchanged against the loonie, euro and Swiss franc.

Hong Kong’s Hang Seng index plunged 1.9%.  In other equity markets, stocks have fallen 0.9% in Italy, Spain and Australia, 0.3% in Germany,Taiwan and South Korea, 0.4% in France and 0.1% in Great Britain, Singapore and India.

The 10-year British gilt yield is down two basis points, while its German and Japanese counterparts remain unchanged.

Gold is 0.4% firmer at $1,220.20 per ounce.  WTI oil is 0.3% softer at $93.22 per barrel.

Tear gas was used by government forces to disperse street protestors in Hong Kong, who are demanding free elections.

Euroland’s economic sentiment index fell 0.7 points to a 10-month low of 99.9.  Industrial sentiment slid 0.2 points to a 1-year low.  Consumer confidence dropped 1.4 points to a 7-month low of -11.4.  Retail sector confidence plumbed to a 10-month low, while confidence in the construction sector rose to a 9-month high.  The business confidence index, 0.07, was at an 11-month trough.

Austria, the first Ezone economy to report September purchasing managers survey results, revealed a 3-point plunge in the PMI to a 17-month low of 47.9.

German CPI inflation in five reporting regional states lay between 0.8% and 1.1% in September, little changed from August.

Although Spain reported negative inflation of -0.2% in September, Spanish 10-year bond yield climbed six basis points, rattled by concern over talk about an independence referendum in Catalonia in early November.  The Italian bond market also stumbled.

Belgian consumer prices slid 0.1% between September 2013 and September 2014, the first on-year drop since 2009.

Irish retail sales fell 2.9% on month in August, cutting the 12-month increase to 6.8% from 8.6%.  Swedish retail sales recovered 1.9% on month and rose 4.6% on year in August.

Portuguese consumer sentiment printed at a deeply negative 24.6 in September, and both economic and business sentiment were low at 0.7.

British M4 money fell 1.5% in the year to August.  Mortgage approvals contracted about 3% to 64,212 that month.  Net mortgage lending and consumer credit were also lower than in July.

Finnish consumer confidence fell 2.9 points to -0.7 in September.

South Korea’s current account surplus of $7.6 billion last month was 14% wider than July’s surplus.

Singaporean producer prices fell 3.9% in the year to August.

Chinese industrial profits, down 0.6% in August from a year earlier, fell for the first time in two years. 

New Zealand did NZD 521 million of kiwi sales in August to depress the currency, which hit an 8-month low today after this revelation.

Former Fed Chairman Bernanke testifies today on the AIG bailout among other things. 

Scheduled U.S. data releases today include pending home sales, personal income and spending and the Dallas Fed manufacturing index.

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

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