A Commodities Cloud Over World Financial Markets

April 25, 2016

The prices of crude oil (WTI down 1.3% to $43.16) and many industrial metals have fallen at the start of the new week, leading to a risk averse mood.  Gold is steady at $1,233.15 per ounce.

Equities in Asia lost 0.8% in Japan, 0.4% in China, 1.2% in Hong Kong, 1.4% in Singapore, 0.7% in Indonesia and 0.6% in India. 

Australian and New Zealand markets were closed, observing Anzac Day.

In Europe, stocks have easied 0.7% in Greece, 0.9% in Italy, 0.3% in France and Spain, 0.5% in Germany, and 0.2% in the United Kingdom.

After falling initially to 111.90 per dollar, the yen rebounded and now shows a 0.5% overnight net advance.  The U.S. currency also has lost 0.4% against the Swiss franc and sterling, 0.3% versus the euro, 0.4% relative to the Swiss franc, 0.2% vis-a-vis the kiwi, and 0.1% against the Australian dollar.  The yuan was fixed at a near 1-month low. 

The 10-year Japanese JGB yield climbed four basis points to -0.08% despite wide speculation that the Bank of Japan will unveil fresh stimulus on Thursday.  The FOMC, which meets at mid-week, is not expected to raise the federal funds rate but upgrade its economic assessment.

The 10-year German bund is two basis points softer, while its British counterpart is unchanged.  The 10-year Italian sovereign debt yield rose to a 2-month high.

Japan’s index of leading economic indicators in February was revised downward to a six-year low of 96.8.  The index of coincident indicators printed at 110.7, down from 112.3 in January, and its trend was characterized by officials as “weakening.”

The German IFO business climate index edged 0.1 point lower in April to a 13-month low of 106.6, but institute officials at IFO said the latest findings still point to a moderate economic upturn.  Expectations actually improved to a 3-month high, while the current situation dropped 0.6 points to a 2-month low.  Manufacturing and construction improved, while the wholesaling and retail components weakened.

The CBI monthly survey of British industrial trends printed three points higher in April at a 4-month high of -11.

Japanese corporate service prices posted a 0.6% on-month increase in March, most in a year, but the 12-month rate of increase stayed at 0.2%.  March ordinarily sees pressure from higher advertising costs.

In the year to March, consumer prices in Singapore fell by a somewhat greater 1.0%, and core inflation was 0.6%.

Malaysia’s jobless rate remained at 3.2% in February.  The Polish and Swedish unemployment rates in March were 10.0% and 7.1%.

In the year to March, Finnish and Spanish producer prices fell by 4.2% and 5.4%.

Czech economic sentiment worsened 1.4 points to a 6-month low of 10.5 in April.  Consumer and business confidence slipped to 7- and 6-month lows.

U.S. new home sales data and the Dallas Fed manufacturing index get reported later today.

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

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