Markets Confused and Fearful about the Coming Year
December 18, 2015
Noontime in New York finds U.S. equities down over 1.0%, the ten-year Treasury yield off two basis points, and the dollar depressed by 1.3% against the yen, 1.0% versus the Aussie dollar, 0.8% relative to the kiwi, 0.5% against the loonie, 0.4% vis-a-vis the euro and 0.1% against sterling.
Share prices fell 1.9% in Japan and Indonesia, 1.1% in India, 0.8% in Taiwan, 0.6% in Hong Kong, and 0.3% in Singapore. Stocks in Europe have fallen 1.6% in Spain, 1.2% in Germany and Italy, 0.8% in the U.K. and 1.1% in France.
WTI oil climbed back above $35 per barrel, a gain overnight of 1.1%. Gold increased 1.5% to $1,066.57 per ounce.
Ten-year JGB and British gilt yields are off two basis points in risk-averse trading. The German bund is down a basis point.
New confusion was sown by the Bank of Japan, whose Board announced technical modifications of the quantitative stimulus program but whose governor said such didn’t represent an enhanced easing of policy.
Central banks in Mexico and Chile raised their key interest rates by 25 basis points each to 3.25% and 3.50%. The decisions were heavily influenced by Wednesday’s hike of the U.S. federal funds rate.
Euroland’s current account surplus fell back to EUR 20.4 billion on a seasonally adjusted basis in October from EUR 30.1 billion in September. The surplus in July-August had averaged EUR 22.1 billion per month.
Markit Economics released December estimates of the U.S. services and composite purchasing managers indices, showing respective drops from the month before of 2.4 points each.
Canadian consumer prices rose 0.2% in November, lifting the 12-month rate of increase to 1.4% from 1.0% in each of the prior two months. Core inflation was at the target of 2.0%. Energy fell 6.4% on year, while food climbed by 3.4%. Wholesale turnover in Canada dropped 0.6% in October but was 1.6% higher than a year earlier.
Dutch consumer confidence fell 3 points in December to a 3-month low, while Belgian consumer sentiment recovered a point to negative 3.
In the year to November, French producer prices declined 1.9%, led by a 4.8% slump in import prices. The French index of leading economic indicators went up 0.2% in October.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: BOJ, Canadian CPI, Eurozone current account