Slow Day for News

August 22, 2016

Even by usual Monday standards, hardly any economic data have been released today, and the week’s main event is still four days away. That will be Janet Yellen’s speech on Friday at the K.C. Fed Jackson Hole Symposium. Despite recent hawkish comments from the likes of New York Fed President Dudley, markets are not currently priced for a rate hike before yearend. It’s in Yellen’s power to change that psychology if she agrees that investors have the timing wrong.

The dollar is generally stronger this morning except for a 0.2% dip against sterling. The greenback otherwise shows gains of 0.9% against the Australian dollar, 0.5% relative to the yen and loonie, 0.4% versus the Swiss franc, and 0.3% vis-a-vis the euro and kiwi. The yuan is steady.

Stock markets around the Pacific Rim were mostly lower, although Japan’s Nikkei closed 0.3% higher. Equities lost 0.8% in China, 0.7% in South Korea, 0.6% in Taiwan, and 0.4% in India. In Europe, by contrast, share prices have so far risen 0.9% in Italy, 0.6% in Switzerland, 0.4% in Germany and Spain, and 0.3% in France and Greece. The British Ftse is 0.3% lower.

The ten-year British gilt and German  bund yields are down by four and three basis points. Japan’s 10-year JGB is unchanged.

Commodity prices are weaker. West Texas Intermediate crude oil fell 1.7% to 47.71 per barrel, and Comex gold is 0.6% softer at $1,338.10 per ounce. Industrial metal prices weakened, too.

Japanese supermarket sales posted a 0.2% on-year uptick in July following drops of 0.5% in June and 1.3% in May.

CPI inflation in Hong Kong slowed to a 7-month low of 2.3% in July and 2.0% on core items.

Swiss M3 money growth accelerated to 2.7% in July from 2.3% on year in June.

The Chicago Fed National Activity index and Mexican GDP report arrive later today.

The Rio Olympics ended Sunday. As a host country, Brazil presented a better image than feared, but major political and economic challenges remain there.

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



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