Mostly Firmer Dollar Ahead of U.S. Jobs Report

November 6, 2015

The U.S. currency shows overnight gains of 0.6% relative to sterling, 0.3% vis-a-vis the loonie, 0.2% versus the yen and 0.1% against the euro, Swissie and yuan.  The dollar is 0.1% softer against the New Zealand and Australian dollars.

Investors generally expect September’s weaker-than-anticipated jobs report to be followed by a solid October set of labor market data, sufficient to keep a December Fed tightening very much in play.

Canadian labor market statistics also get released today.

Share prices in the Pacific Rim rose 1.9% in China, 0.8% in Japan, and 0.4% in Australia but fell 1.8% in Taiwan and 0.4% in South Korea and Singapore.  In Europe, stocks have fallen by 0.7% in Switzerland, 0.6% in France, 0.5% in Spain, and 0.1% in the U.K., but the German Dax is flat.

West Texas Intermediate oil recovered 0.6% to $45.48 per barrel.  Comex gold is 0.4% stronger at $1,108.60 per ounce.

The ten-year British gilt yield settled back two basis points.  Comparable German bund and Japanese JGB yields are unchanged.

Australia’s construction purchasing managers index increased 0.3 points to a 2-month high of 52.1 

The Reserve Bank of Australia’s quarterly Monetary Policy Statement was published.  Core inflation this year has been lower than previously forecast, and such is projected to hover around the middle of the 2-3% target over the coming two years.  Officials note uncertainty surrounding future growth in Asia and still feel that more easing may become appropriate.

Bank of Japan Governor Kuroda spoke publicly in a somewhat more guarded way than before about economic prospects.  Faster wage growth is needed, and emerging market demand may not recover as much as assumed.

Japan’s index of leading economic indicators fell 2.1 points to 101.1 in September, a 33-month low.  The index of coincident economic indicators edged 0.3 points lower to a 6-month low of 111.9, compelling government officials to label its trend as “weakening” for a fifth straight time.

September Industrial production statistics were released for Germany, Spain, Britain, the Czech Republic, Denmark, Norway, and ungary.

  • German output failed to rise as forecast but instead tumbled 1.1% in September on top of August’s 0.6% slide.  Production was only 0.2% higher on year and also 0.9% below the 3Q mean.  Factory output fell 1.4% in the month.  Both capital goods and consumer goods also dropped 1.4.
  • British industrial production dipped 0.2% in September, dampening third-quarter production growth to 0.2%.  Compared to a year earlier, industrial production rose 1.1% in September but fell 0.3% in 3Q.  Factory output was 0.6% greater than in September 2014 but 0.1% softer in 3Q15 than 3Q14.
  • Spanish industrial production increased 1.2% on month in September, the biggest on-month rise since March, and recorded a 3.8% 12-month advance.
  • Czech industrial output in September posted a calendar-day adjusted 3.1% increase, down from 6.3% in August.
  • Danish output fell 1.4% on month but rose 1.9% on year in September.
  • Norwegian industrial production increased 1.6% in September, nearly as much as August’s 1.7% gain, and was 2.0% higher than a year before.
  • In Hungary, a 7.8% on-year increase in output was the most since March and much greater than forecast.

The French trade deficit swelled to a 4-month high in September of EUR 3.38 billion, as exports dipped 0.6% on month and imports rose 0.5%.

The British goods and services trade deficit of GBP 1.353 billion in September was less than half as much as August’s shortfall.  The merchandise trade deficit narrowed to GBP 9.35 billion from GBP 10.79 billion the month before.

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

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