Tuesday-Wednesday Two-Day Highlights

March 23, 2016

The dollar on Wednesday extended Tuesday gains and has appreciated since the Monday closing by 1.3% against sterling, 0.7% vrsus the yen, 0.9% vis-a-vis the kiwi, 0.5% relative to the euro and Swiss franc, and 0.3% against the Chinese yuan.  Chicago Fed President Evans made bullish remarks about the likelihood of more interest rate hikes this year.

At least 35 people were killed and more than 225 others were injured in ISIS attacks at the Brussels airport and a subway station.

Share prices yesterday and today climbed 1.7% in Japan, 1.5% in Germany and 0.3% in Japan.  The DJIA closed marginally lower on Tuesday.

Among 10-year sovereign debt yields, the German bund and Japanese JGB recorded 2-day net dips of two basis points, while their British counterpart rose 2 basis points.

Gold has fallen 1.4% since the Monday close, but WTI oil is 5.6% higher.

Hungary’s central bank base rate was sliced 15 basis points to 1.20%, and a statement pointing to more reductions was released.  This was the first change since July 2015.  Between August 2012 and July 2015, the rate had been reduced from 7.0% to 1.35%, yet Hungarian inflation remains far below the 2-4% target.

The Bank of Thailand retained a 1.50% policy rate, the level since a 25-basis point cut in April 2015.  Officials revised projected GDP growth downward.

At Bangko Sentral ng Pilipinas, the overnight borrowing rate was kept at 4.0% as expected.  Its last change was a 25-bp hike in September 2014.

The Richmond Fed manufacturing index jumped 26 points to a reading of +22 in March.  U.S. existing home sales dropped 7.1% in February, led by a 17.1% slump in the Northeast.  The Chicago Fed National Activity Index returned to the red, printing at -0.29 in February following +0.41 in January.  The FHFA home price index rose 0.5% on month in January.

Euroland’s composite purchasing managers index improved 0.7 points to a 2-month high of 53.7 in March, according to the preliminary estimate.  Germany’s composite PMI remained unchanged at 54.1, while France’s composite PMI rebounded 1.8 points to 51.1.

German business climate according to the IFO Institute rose for the first time since November, climbing a full point to 106.7 in March.  Current conditions reached a six-month high, and expectations touched a 2-month high.

Investor expectations toward Germany went up 3.3 points to 4.3 in March according to the ZEW Institute, but the gauge for Euroland fell 3 points to 10.6.

The Swiss ZEW expectations index rose 8.4 points to +2.5 in March.

Japan’s all industry index recovered 2.0% in January but was still 0.9% lower than a year earlier.

The Flash Japan Manufacturing PMI at 49.1 after 50.1 in February implied a deterioration in operating conditions for first time since April 2015.

Japanese supermarket sales recorded a 3.4% on-year advance in February, more than the 2.3% January-over-January increase.

British consumer price inflation held steady at 0.3% last month.  Producer output prices fell 1.1% over the last dozen reported months, while producer input prices dropped 8.1%.

Sweden’s economy tendency index softened 1.3 points to a reading of 106.6 in March despite improved consumer confidence.  Manufacturing worsened.

In the year to February, Spanish producer prices fell 5.7%.  Singapore consumer prices dipped 0.8%.  Irish producer prices edged 0.3% lower.  Italian hourly wages rose 0.8%.  But South African consumer price inflation edged higher to 7.0%, driven by rand depreciation.

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

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