Markets Watching G20 Meeting… More Low Inflation News

February 26, 2016

Finance Ministers and central bank chiefs from the Group of Twenty economies began a two-day conference in Shanghai.  The Governor of the Peoples Bank of China denied the yuan will be devalued and said other tools are available to support demand in the world’s second biggest economy.  Chinese property prices rose 2.5% in January.  More Chinese cities reported an on-year rise in than had in December.

Scheduled U.S. data releases today included revised quarterly GDP, monthly income and personal spending, and consumer sentiment.

The dollar hardly changed overnight with 0.1% downticks against the yen, sterling and Australian dollar and 0.1% upticks relative to the loonie, Swissie and yuan. The EUR/USD relationship is unchanged.

Stocks continue to show a bid tone, aided by a 0.8% rise in crude oil prices.  Share prices rose 1.8% in Singapore, 1.6% in Indonesia, 2.3% in Hong Kong, 1.0% in China, 0.8% in India, 0.5% in Taiwan and 0.3% in Japan.  In Europe, equities show increases of 1.3% in Germany and France, 1.2% in Italy, 4.1% in Greece, 0.9% in Spain and the U.K. and 0.7% in Switzerland.

West Texas Intermediate crude oil firmed 0.8% to $33.33 per barrel.  Russia and Iran are in talks over oil production.  Comex gold is 0.3% higher at $1,236.75 per troy ounce.

Four of five reporting German states (Saxony, Hesse, Brandenburg, and Bavaria) had negative on-year consumer price inflation in February.  Each case was a switch from above-zero results in January.

On-year hourly wage growth in Italy slowed to 0.7% in January from 1.3% in December. 

Core consumer prices in Japan were unchanged on year in January versus a 0.1% 12-month increase in December.  Energy prices sank 2.6% on month and 10.7% on year.

French consumer prices recorded their first on-year drop in February (-0.2%) since last March and the largest 12-month decrease in a year.

Total French producer prices fell 2.0% on year in January.  Domestic industrial producer prices were 2.5% lower than a year earlier.

Spain’s flash February CPI was 0.8% lower than in February 2015 after dropping 0.3% on year in January and being unchanged in December.

Belgian consumer prices ticked up 0.1% in February and were 1.4% above their year-earlier level.

Harmonized Icelandic consumer prices were 1.1% higher than a year before in January.

Euroland sentiment indicators were reported for February.  The economic sentiment index dropped 1.3 points to an 8-month low of 103.8.  The business climate index fell 0.22 to 0.07, lowest since October 2013.  Industrial confidence dropped 1.3 points to its weakest level in a year.  Consumer confidence (-8.8) matched the preliminary report.  Sentiment in services and retail recorded 5- and 7-month lows.  Only construction improved, rising 2.5 points to a 3-month high of -17.5.

Industrial production in Taiwan posted a third consecutive monthly decline and was 5.7% lower in January than a year earlier. 

French real consumer spending rose 0.6% on month and on year in January.

Swedish retail sales rose 0.7% in January and recorded an unchanged on-year advance of 4.0%.

Austria’s manufacturing purchasing managers index improved 0.7 points in February to a 4-month high of 51.9.

Australian markets were shut for Australia Day.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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