Share Prices Up, Dollar Fairly Steady Awaiting U.S. CPI and Industrial Production Data

November 17, 2015

The dollar is unchanged against the Canadian dollar and sterling.  It has risen 0.3% versus the Swiss franc and kiwi, 0.2% relative to the euro, and 0.1% vis-a-vis the yuan and yen but lost 0.3% against the Australian dollar.

The Aussie dollar was buoyed by Reserve Bank of Australia minutes of the November 3rd Board meeting, which while leaving a door open for another interest rate cut observed better labor market conditions and a weaker exchange rate and overall signaled little desire to make policy even more accommodative.

With few exceptions, screens are showing green for share prices in the Pacific Rim and Europe.  Stocks climbed 2.3% in Australia, 1.2% in Japan, 1.3% in Indonesia, 1.1% in South Korea, and 1.0% in Hong Kong.  The Paris Cac has traded 2.3% as the French government continued air strikes against ISIS in Syria.  Equities are up 1.8% in Germany and the U.K., 1.6% in Italy, 2.0% in Spain and 2.1% in Switzerland.  China’s market dipped 0.1%.

Commodities remain soft.  Oil fell 1.0% to $41.33 per barrel overnight, and gold is down 0.3% at $1,079.16 per ounce.

The 10-year British gilt yield is 3 basis points firmer, but its German and Japanese counterparts are steady.

British CPI inflation stayed in the red last month, printing at a 0.1% on-year dip, same as recorded in September.  Core CPI edged up 0.1 percentage point to 1.1%.  RPI inflation slipped 0.1 percentage point to 0.7%.  Producer output prices fell 1.3% on year in October (core +0.3%), while producer input price deflation eased slightly to -12.1%.  The Department of Communities and Local Government house price index went up 0.8% on month and set a 6-month high with a 12-month increase of 6.1%.

The German ZEW Economic Institute reported November investor sentiment toward German and the eurozone.  The German sentiment index recovered to a two-month high of 10.4 from October’s low of 1.9 but was accompanied by a 9-month low in the perceived current situation whose index fell to 54.4 from 55.2.  The sentiment index regarding Europland dropped to a one-year low of 28.3 from 30.1 posted in October.  Current conditions in the eurozone recorded a score of negative 10.0, 1.1 points better than in October.

Mainland Norwegian GDP grew 0.2% in the third quarter, a shade better than forecast, and total GDP including offshore energy advanced 1.8% following no growth recorded in the spring quarter.

Italy’s EUR 3.55 billion trade surplus in September was little different from August’s result.  Romania’s current account deficit widened 73% on quarter to EUR 777 million in 3Q15.

EU new car sales growth slowed to an on-year pace of 2.9% in October from 9.8% in September.

Icelandic consumer prices fell 0.3% on month in October, trimming the 12-month rate of increase to just 0.4%.

Bank Indonesia’s BI interest rate was left unchanged as expected at 7.5%, but the central bank’s Board of Governors cut the primary minimum reserve requirement to 7.5% from 8.0%.  The BI rate had been changed just once before in 2015, a cut of 25 bps engineered last February.

Hungary’s central bank is also holding an interest rate policy meeting today and expected to leave such at 1.35%.

Aside from consumer prices and industrial production, the U.S. data calendar shows weekly chain store sales and the monthly NAHB housing index and Treasury-compiled capital flows (TIC).  Fed Governor Tarullo speaks publicly.

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

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