Oil Price Retreat Extended

March 29, 2016

West Texas Intermediate crude oil slid another 2% and is trading about 7% below last Wednesday’s close.  Gold (down 0.3%) and most metals are lower, too, adding to the heaviness of commodity-sensitive currencies.

A narrowly mixed dollar is down 0.5% against the New Zealand dollar and shows losses of 0.2% against the loonie and sterling but upticks of 0.2% versus the yen and Australian dollar.  The dollar is 0.1% softer against the euro and yuan and 0.1% firmer relative to the Swiss franc.

Ten-year sovereign debt yields fell 7 basis points in Spain, 6 bps in Italy, 4 bps in the U.K., and 2 bps in Germany.  The 10-year Treasury yield is lower in futures trading, while the 10-year Japanese JGB is steady at minus 0.09%.

Equities dropped 1.6% in Australia, 1.3% in China, 0.8% in Taiwan, 0.4% in Singapore and 0.2% in Japan.  Share prices have eased 0.2% in Germany, Britain and Switzerland.

Corporate earnings in China rebounded to a 4.8% on-year increase in January-February from a 4.7% drop between December 2014 and December 2015.

Several Japanese economic indicators have been reported.

  • Small business sentiment in Japan improved 0.9 points to a 4-month high of 48.8 in March.
  • The jobless rate unexpectedly rose 0.1 percentage point to 3.3% in February, matching the November and December readings.  Employment was 0.5% greater than a year before, down from a 1.4% January-over-January increase.
  • Real household sepending jumped 1.8% on month in February this leap year and surpassed the February 2015 level by 1.2%, but real personal income and real disposable income recorded on-year declines of 2.4% and 3.4% last month.
  • Total retail sales were disappointing, moreover, declining 2.3% on month in February and posting a smaller-than-expected 0.5% increase from a year earlier. 

A number of countries released sentiment indices.  South Korean consumer confidence rebounded to a reading of 100 in March, same as in January and two points higher than February’s outcome.  Finnish consumer confidence jumped 2.7 points to a 9-month high of 10.4 in March.  Italian consumer sentiment rose a half-point to 115.0 in March following a 3.5-point plunge in February.  Italian business sentiment fell 3.1 points to 100.1 in March in spite of a 0.2-point uptick in manufacturers’ sentiment.  A -4 reading on manufacturing sentiment in Finland was the smallest negative outcome in 47 months.

Euroland M3 money grew 5.0% on year in January-February, same as in 4Q15.  M1 growth slowed a tad last month, but M2 picked up.  Loan growth to the private sector remained subdued, recording on-year growth of 0.9% after 0.6% in January and 0.4% in December. 

The contracting trend in optimism among British financial firms accelerated to a 5-year high according to the CBI survey on worries about the June 23 referendum on leaving the EU.

Swedish retail sales slipped 0.2% on month and recorded a smaller 3.9% advance between February 2015 and last month.  The SEK 0.2 billion Swedish trade deficit in February was SEK 3.1 billion weaker than a year earlier, reflecting export growth of only 1%.

Producer prices in Singapore were 8.3% lower in February than a year earlier.  Hong Kong’s trade deficit nearly doubled between January and February.  The two-month shortfall of HKD 50.5 billion was 30.5% smaller than a year earlier, however, as a 9.5% plunge in imports surpassed the on-year drop in exports.

Just ahead: U.S. Case-Shiller home price index and Conference Board index of U.S. consumer confidence.

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

Tags: , ,


Comments are closed.