Constructive Start to a Holiday-Shortened Week
March 21, 2016
The Shanghai Composite Chinese equity index advanced 2.2% in response to a relaxation of government curbs there on margin lending.
Japanese markets were closed for the Vernal Equinox holiday.
Other stock markets in the Pacific Rim rose 1.3% in India, 0.5% in New Zealand and 0.3% in Hong Kong. In Europe, equities are mixed, with gains of 0.8% in Italy, 0.6% in Switzerland and Germany and 0.2% in Spain but losses of 0.7% in France, 0.2% in Greece and 0.1% in the U.K..
The dollar is unchanged against the euro, yen, Swiss franc and Aussie dollar. It has risen 0.6% versus sterling, 0.3% relative to the loonie and kiwi and 0.2% vis-a-vis the Chinese yuan. With South Africa observing the 56th anniversary of the Sharpville Massacre on this Human Rights Day holiday, the rand fell over 1.0%.
The 10-year German bund yield edged a basis point higher, while the 10-year British gilt is down a basis point.
West Texas Intermediate oil dropped 1.2% to $38.96 per barrel. Comex gold is down 0.6% at $1,247.66 per ounce.
Comparative hawkish southern Federal Reserve District presidents — Lacker of Atlanta and Lockhart of Richmond– each express confidence that U.S. inflation will be accelerating back to the 2% target.
Two officials of the European Central Bank also spoke publicly. Coeure argued that the ECB has ample tools to lift inflation back to target, and Likanen voiced confidence that stimulus already delivered by the ECB will lift inflation.
Euroland’s seasonally adjusted current account surplus fell EUR 3.2 billion in January to a 5-month low of EUR 25.4 billion. The surplus over the past 12 reported months equaled 3.0% of GDP, up from 2.5% during the previous statement year through January 2015.
The Swiss current account surplus last quarter equaled CHF 15.908 billion, down from CHF 22.811 billion in the third quarter of 2015 and CHF 20.400 billion in the final quarter of 2014. Swiss M3 money grew 1.7% on year in February.
Italy recorded a EUR 1.07 billion current account deficit in January. This compares to a December deficit of EUR 6.14 billion and a January 2015 deficit of EUR 1.79 billion. Italy has been running a merchandise trade surplus but a current account deficit.
Spain had a EUR 2.39 billion trade deficit in January, somewhat smaller than the shortfall in December. Portugal posted a EUR 157 million current account deficit in January, compared to a deficit of EUR 232 million in December and a EUR 2.95 surplus a year earlier.
The Bank of Mexico left its key interest rate unchanged at 3.75%. There had been increases of 25 basis points in December and 50 bps in February.
The Confederation of British Industries index of U.K. industrial trends rose 3 points to a 3-month high of -14 in March but was still 7 points weaker than December’s level.
The British Rightmove house price index increased 1.3% on month in March and accelerated to a 7.6% 12-month rate of increase from 7.3% in February.
CPI inflation in Hong Kong increased 0.4 percentage points to an 8-month high of 3.1% in February.
Danish consumer confidence softened to a 5-month low in March. Turkish consumer sentiment picked up slightly in the same month.
U.S. scheduled data releases today are the Chicago Fed National Activity Index and existing home sales. The preliminary indication for consumer sentiment in Euroland will be revealed by Eurostat later today as well.
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland current account