Stronger Dollar and European Share Prices

January 12, 2015

The U.S. dollar has risen by 0.8% against the kiwi, 0.6% versus the yen, 0.5% relative to the Australian dollar, 0.4% vis-a-vis the euro, 0.3% against the Swiss franc and 0.2% relative to sterling.  The loonie is steady, and the yuan has edged 0.1% higher.

In European stock market action, the Paris Cac so far has advanced 1.7%, followed by gains of 1.6% in the German Dax, 1.4% in the Madrid IBEX, and 1.0% in the Italian and Swiss stock exchanges.  The British Ftse is 0.5% higher.  Japanese markets were shut for Coming of Age Day.  Elsewhere in the Pacific Rim, stocks lost 0.9% in China, 0.8% in Australia, 0.6% in Indonesia, 0.4% in Taiwan, and 0.2% in South Korea but rose 0.5% in New Zealand and India.

The ten-year British gilt yield rose a basis point, while the 10-year German bund is unchanged.

WTI oil sank 2.5% to $47.15 per barrel.  Comex gold is 0.3% firmer at $1,220.10 per ounce.

There was an enormous peaceful gathering in Paris to protest last week’s reign of terror.

The Bank of France’s manufacturing sentiment index posted a December reading of 96, same as in October, September and July and a point less than the 97 score in November and August.  Business sentiment in services also fell last month, registering a score of 91 after 93 in the prior five months.  The Bank of France is sticking to a forecast GDP uptick of 0.1% last quarter in its monthly forecast, however.

Ireland’s construction purchasing managers index dipped 0.2 points to a still-robust reading of 63.1 in December.  That was the fifth 60+ result in a row but represented a 3-month low.

Retail sales in the Czech Republic rose 0.4% on month in November but a considerably smaller 4.1% 12-month advance adjusted for working day variations.

Danish consumer prices fell 0.2% on month in both November and December.  The 0.3% 12-month rate of rise was down from 0.5% in the three previous months.

Australian home loans data disappointed with a drop of 0.7% in November, the third decline in four months.  Analysts were looking for an increase of more than 1.5%. 

Factory output in South Africa also were considerably weaker than assumed, posting a drop in November of 2.1% on month and 1.3% on year.

No market-moving U.S. data releases are scheduled today, but the NFIB index of small business sentiment, the Labor Department JOLTS index, and the IBD/TIPP index arrive Tuesday as well as the usual weekly chain store sales numbers.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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