Euro Touches but Doesn’t Penetrate $1.1400

October 12, 2015

Market activity this Monday will be blunted by holiday closures in the United States (Columbus Day), Spain (Hispanic Day), Japan (Health Sports Day) and Canada (Thanksgiving).  Only minor data were released today.

The IMF/World Bank meeting in Lima, Peru wound up with Director Lagarde warning of the dangers of premature tightening of monetary policy, and a cabal of former policymakers including Trichet, Weber, and Frankel issuing a paper that argues that prolonged loose money is no substitute for necessary structural reforms.

The rebound in Chinese share prices continued into a new week, gaining over 3.0% today.  Equities also rose 1.5% in Hong Kong and  Taiwan, 1.1% in Singapore, 0.9% in Indonesia but fell 0.9% in Australia.  Stocks in Europe are donw 0.5% in France, 0.4% in Great Britain, Greece and Italy, and 0.1% in Switzerland but have risen 0.2% in Germany.

The dollar got as low as 1.1400 per euro, but its losses were pared to 0.2%.  The dollar has lost 0.6% versus the Swiss franc, 0.5% vis-a-vis the Australian dollar, 0.3% relative to the kiwi and sterling, 0.2% against the yuan and 0.1% versus the yen and loonie.

The 10-year British gilt yield slipped three basis points.  The 10-year German bund is unchanged. 

WTI oil is trading just south of $50/barrel.  Comex gold increased 0.7% to $1,164.88 per ounce.

In Lima, the current ECB President, Mario Draghi, said that quantitative stimulus is succeeding better than imagined.  His predecessor doesn’t like the policy.

Ireland’s construction purchasing managers index fell 0.7 points to a 6-month low of 55.8 in September, which still implies pretty robust growth.

Consumer prices in the year to September rose 0.9% in Portugal and 0.5% in Denmark, but Romanian consumer prices fell by 1.75% in the year to August.

The Dutch trade surplus, which has been squeezed by lower global energy prices, narrowed 39.4% on month to EUR 2.95 billion in August. Romania’s trade deficit in August of EUR 857 million was 34.5% wider than July’s surplus. 

Malaysian industrial production fell 0.9% in August as a 10.2% plunge in mining outweighed a 1.9% rise in manufacturing.  The 12-month 3.0% increase was lower than the average on-year gain in January-July.  Romanian industrial output slid 0.5% on month but rose 3.4% on year in August.

The French current account swung from a EUR 0.4 billion deficit in July to a EUR 0.2 billion surplus in August.

New Zealand home prices in September were 15.4% greater than than a year earlier, while house sales advanced even more sharply (38.3%). 

Bank of Canada Governor Poloz said sharply lower oil prices had dampened Canada’s growth and inflation outlook but also warned that loose monetary policy poses added risk to Canada’s excessive household debt.

Several Fed officials — Evans, Lockhart, and Brainard — are scheduled to speak publicly today.

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

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