More Trouble in Ukraine

November 7, 2014

Fighting has intensified in Ukraine, lending a more guarded mood to investor sentiment.  While the rhetoric of ECB President Draghi’s comments Thursday were bearish, investors are asking, where’s the beef?

The dollar is marking time ahead of the U.S. monthly labor force report.  The greenback is unchanged against the yen and kiwi and down 0.3% versis the Aussie dollar, 0.2% relative to the Swiss franc and 0.1% vis-a-vis the euro.  The dollar had edged 0.1% higher against the loonie and sterling.  The Russian ruble is especially weak.

Bank share prices have led drops of 1.3% in the Spanish IBEX, 1.1% in Italian stocks, 0.6% in the Paris Cac and 0.4% in the German and Swiss stock markets.  In the Pacific Rim, stocks closed up 0.8% in Australia, 0.5% in Japan, 0.3% in New Zealand and 0.2% in Taiwan and South Korea but fell by 0.9% in Indonesia, 0.4% in Hong Kong and 0.2% in China.

Ten-year sovereign debt yields rose two basis points in Britain and one basis point in Germany and Japan.

WTI oil climbed 0.4% to $78.19 per barrel.  Comex gold is 0.2% firmer at $1,114.70 per ounce.

After slumping 3.1% in August, German industrial production recovered by a smaller-than-forecast 1.4% in September.  Output fell 0.4% between 2Q and 3Q after a decline of 1.1% during the second quarter. 

French industrial production stagnated in September and was 0.3% lower than in September 2013.  German output had been down 0.1% on year.  Dutch industrial production slid 0.3% in the year to September, while Norwegian output advanced 7.7% in the same span of time.  Spanish production was 1.0% greater in September than 12 months earlier.

Swiss joblessness held steady at 3.2% last month.

The German seasonally adjusted trade surplus increased EUR 1.0 billion on month to EUR 18.5 billion in September and averaged EUR 19.4 billion per month in 3Q versus EUR 17.5 billion in 2Q, EUR 16.0 billion in 1Q and EUR 16.6 billion during 2013.  The unadjusted September current account of EUR 22.3 billion was 1.4% bigger than a year earlier.

The French trade deficit in September of EUR 4.7 billion was 19% narrower than August’s EUR 4.8 billion imbalance.

Britain recorded larger deficits in September than August of GBP 2.838 billion in goods and services commerce and GBP 9.821 billion in merchandise only.

Hungary’s trade surplus widened 11.6% to 953 million euros in September.   

The Malaysian trade surplus of MYR 9.3 billion was 2.4 times bigger in September than August.

The Bank of France projects French growth of 0.1% in the final quarter of 2014. French business sentiment was unchanged in October.

Australia’s construction purchasing managers index fell 5.7 points to a 3-month low of 53.4 in October.  The Reserve Bank of Australia’s quarterly monetary policy statement included the comment that the currency remains high by historical standards, which had not been repeated in the post-meeting communique earlier this week.  The currency fell today.

Japanese stock and bond transactions last week generated a JPY 412 billion net capital outflow.

Canadian as well as U.S. labor statistics arrive today.  So do Mexican consumer and producer price data.

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

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