Wednesday Before Thanksgiving Rundown

November 23, 2016

The dollar gained broad ground, closing near the day’s highs including 112.53 per yen. Japanese markets were closed for Labor Thanksgiving.

Stocks and bond yields climbed. Gold fell below $1,200 per ounce and WTI oil touched $48.0 per barrel.

Bank Negara Malaysia retained a 3.0% overnight policy rate as expected.

Preliminary PMI surveys were reported for Euroland, Germany and France. Euroland’s composite PMI index of 54.1 indicated the fastest growth of 2016. Manufacturing went up 0.2 points to 53.7, while services leaped 1.3 points to 54.1.

Several U.S. indicators were reported:

  • Durable goods orders jumped 4.8% in October, much more than expected.
  • New jobless insurance claims averaged 251K per week over the past four weeks, similar to 253K during the previous eight weeks.
  • New home sales fell 1.9% in September following a 3.1% increase in August.
  • The FHFA house price index went up 0.6% in September.
  • The November consumer sentiment index compiled by U. Michigan and Reuters was revised up to 93.8 in November from 91.6 estimated initially. October’s reading had been 87.2.

Released FOMC minutes from the November 1-2 meeting showed a committee highly predisposed to raising the 0.25-0.50% federal funds target range in December.  Data this month and rising long-term interest rates since the U.S. election strengthen the case for tightening in December even further.

Fed tightening and likely continuing ECB and BOJ quantitative stimulus point to an appreciating dollar.

In the year to October, consumer prices in Singapore slipped 0.1% and rose 6.4% in South Africa.

Mexican GDP rose 2.0% in the year to 3Q, down from 2.6% in the year to 2Q.

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



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