Euro Down Ahead of U.S. February Labor Market Data

March 6, 2015

The euro fell in the wake of yesterday’s ECB press conference and is down an additional 0.9% against the dollar overnight, hitting a new low for the move of $1.0929.  The U.S. currency otherwise rose 0.2% versus the kiwi and 0.4% against the Swiss franc and sterling.  At the same time, the dollar has fallen by 0.4% against the Australian dollar, 0.3% relative to the loonie and 0.1% vis-a-vis the yen.  The yuan is steady.

Japan’s Nikkei advanced 1.2%.  Elsewhere around the Pacific Rim, equities closed up 0.8% in New Zealand and Indonesia, 07% in Singapore and South Korea, 0.5% in Taiwan but down 0.5% in China and off 0.1% in Hong Kong and Australia.  In Europe, share prices have risen 0.6% in Switzerland, 0.4% in Italy, 0.3% in Greece and 0.1% in Germany and France.  The British Ftse and Madrid Ibex have edged down 0.1%.

The 10-year Japanese JGB yield slipped two basis points.  The 10-year German bund and British gilt dipped a basis point each.

Gold is unchanged at $1,195.80 per troy ounce.  West Texas Intermediate oil firmed 0.2% to $50.87 per barrel.

Revised eurozone GDP figures confirmed the initial 0.3% 4Q-over-3Q growth.  Personal consumption and business investment each climbed by 0.4%, while a 0.2% gain in government spending matched the results in each of the first three quarters of last year.  With export growth of 0.8% twice as fast as import growth, net foreign demand augmented GDP growth by 0.2 percentage points but was offset by a comparable drag from inventories.  Fourth quarter-over-fourth quarter growth rose to a 3-quarter high of 0.9%.  Most of that gain reflected a 1.4% advance in personal consumption.

German industrial production in January went up by 0.6%, which was close to expectations and the fifth increase in a row.  A 5% jump in construction accounted for the rise, as energy and manufacturing were both flat on the month.  Industrial output was 0.9% greater than a year earlier.

Several other countries reported industrial output, too.  In Norway, an energy producer, production plunged 3.0% on month and fell 0.4% on year.  Danish output firmed 0.3% on month and 0.9% on year.  Spanish production posted gains of 0.2% from December and 0.4% from January 2014.  In Hungary, industrial production accelerated to a 12-month rise of 7.7% in January from 7.1% in December. 

Hungarian real GDP in 4Q also was reported as up 0.8% on quarter and by 3.4% on year, while GDP growth in Romania decelerated to a quarterly 0.5% gain and a 2.5% on-year pace.

Swiss consumer price deflation deepened in February.  The CPI fell 0.3% on month and 0.8% on year, which was the largest 12-month decline since June 2012.

Italian producer prices fell 1.1% on month and 2.9% on year in January.

The French trade deficit of EUR 3.72 billion in January was wider than forecast as exports fell 2.5% on month.  The deficit had narrowed 12% in 2014.

British inflation expectations slowed substantially between November and February according to the latest Bank of England survey.  Over the coming year, consumer prices are projected to rise 1.9%, down from 2.5% in the prior survey.

British consumer confidence weakened to 1.9% in February from 2.5% the month before.

All banks passed the latest U.S. stress test.

Japan’s index of leading economic indicators dipped by 0.2 points to 105.1 in January.  But the index of coincident economic indicators jumped 2.4 points to a ten-month high of 113.0, and government officials in response upgraded their assessment of the coincident index’s trend to “improving,” its best classification since March 2014.

Japanese international reserves slumped by $9.991 billion last month and have fallen $17.967 billion over the past three reported months.

Australia’s construction purchasing managers index fell 2.0 points in February to a 4-month low of 43.9.  This was the fifth straight sub-50 reading.

Besides the Labor Department report on jobs, unemployment and wage earnings, scheduled U.S. data arriving today are the trade deficit and consumer credit.  Canada releases trade and building permits.

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

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