German IFO Figures Better Than Expected inn Otherwise Uneventful Overnight Session

March 25, 2015

The dollar moved 0.4% lower against the euro overnight and also lost 0.2% versus sterling and 0.1% relative to the yen, kiwi, Aussie dollar and Swiss franc.  The U.S. currency is unchanged against the loonie and has recouped 0.1% vis-a-vis the yuan.

Stocks in the Pacific Rim fell 0.8% in Indonesia and China, 0.7% in Taiwan, and 0.2% in India and New Zealand but closed up 0.5% in Hong Kong, 0.2% in Japan and Singapore and 0.1% in Australia and South Korea.  European stocks were more uniformly lower, with losses of 0.5% in France, 0.4% in Spain, 0.3% in Germany and Italy, and 0.2% in Switzerland.  Greek markets were closed for Independence Day. 

Ten-year sovereign debt yields fell three basis points in Great Britain, rose a basis point in Japan and are unchanged in Germany.

Gold at $1,191.70 per ounce is also flat.  West Texas Intermediate oil edged 0.1% lower to $47.48 per barrel.

The IFO German business climate index climbed 1.1 points to an 8-month high of 107.9, which is 4.5 points above the recent October low of 103.4.  Expectations went up 1.4 points to a 9-month high, while the subindex for current conditions improved by 0.7 of a point.  Retail, wholesale and manufacturing gained further ground, while construction declined 2.0 points but remained strong from a broader historic perspective.  The IFO services climate index rose to a 2-month high.

French business sentiment in manufacturing slid a point to 99 in March after back-to-back readings of 100.  Service sector sentiment edged up a point to 93.

Sweden’s economic tendency index fell back 2.7 points to 101.5, as weakening manufacturing offset improved consumer confidence.

Dutch producer confidence posted a 1.4 score in March, down 0.6 from February and the third drop in a row.

Chinese consumer confidence improved 2.4% in March.

Japanese corporate service price inflation slowed 0.2 percentage points to a ten-month low of 3.3% in February.  The size of the Bank of Japan’s balance sheet contracted 1.2 billion yen over the first twenty days of March to JPY 319.4 trillion.

New Zealand recorded a second straight trade surplus in February, although each was very small.  A deficit of NZD 2.18 billion accrued over the past dozen reported months, and exports posted an outsized drop of 13% in February from a year earlier.

South Korean fourth-quarter GDP growth was revised to a 0.4% quarterly advance and 2.7% from a year earlier.  GDP climbed 3.3% in 2014 after 2.9% in 2013.

The Filipino trade deficit in January of $752 million was 12.4% wider than December’s imbalance.

The UBS Swiss consumption indicator printed weakly at 1.19 in February, up 0.08 from January but still 0.23 points lower than in December.

The British Bankers Association reported a five-month high in U.K. mortgage approvals of 37.3K in February.

A 1.2% rise of Austrian industrial production in January trimmed the on-year decline sharply to a mere 0.1%.

U.S. durable goods orders and weekly oil inventories data get reported today.  Chicago Fed President Evans will be speaking publicly.  St. Louis Fed President Bullard yesterday called a zero interest rate policy inappropriate in today’s economic conditions and urged a tightening asap.  Bullard is not a voting member of the FOMC this year, however.

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



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