North American Holidays Dull Activity

February 20, 2017

The U.S. and Canada are closed for Presidents Day and Family Day.

The dollar fell overseas by 0.4% against sterling. Britain’s House of Lords will be discussing whether to amend how Article 50, which will govern the Brexit process, is to be triggered.

The dollar climbed half a percent against the rand. South African Finance Minister Pravin allegedly may be charged with fraud.

The dollar advanced 0.3% against the yen where a much larger-than-anticipated Japanese January trade deficit of JPY 1.087 trillion was reported. Imports jumped 8.5% on year, while exports only increased 1.3%. The seasonally adjusted surplus of JPY 155 billion was down from JPY 328 billion in December and JPY 419 billion in November.

The dollar otherwise firmed 0.2% against the Swissie, yuan and peso and 0.1% vis-a-vis the loonie and euro. The greenback edged down 0.1% against the Swiss franc and is flat versus the kiwi.

Comex gold dipped 0.2% to $1,237.30 per ounce, and WTI oil climbed 0.5% to $53.64 per barrel.

10-year sovereign debt yields rose four basis points in France, 3 bps in Italy and 1 bp in the U.K. and Japan but eased a basis point in Germany.

In stock market action, equities rose 1.2% in China, 0.7% in India, but just 0.1% in Japan. Stocks in Europe are up 1.1% in Greece, 0.5% in Germany and 0.2% in Spain but down 0.3% in Italy and 0.1% in France. The British Ftse is unchanged.

In comments, Cleveland Fed President Loretta Mester joined a growing chorus of FOMC members inclined toward raising the federal funds rate.

A German political poll showed the left-of-center Social Democrats pulling ahead of Chancellor Merkel’s Christian Democratic Party. A parliamentary election will be held in the early autumn.

Kraft’s effort to acquire Unilever is off the table.

Real GDP in the bloc of economies known as the Organization of Economic Cooperation and Development rose 0.4% on quarter and 1.7% on year in the final quarter of 2016. Average growth last calendar year was also 1.7%.

Producer output price inflation in New Zealand jumped from 0.1% in 3Q16 to 2.5% last quarter due to a 1.5% quarter-0n-quarter advance. Producer input price inflation of 2.3% compared to 0.1% in the third quarter of 2016 and -1.1% in the final quarter of 2015.

New Zealand’s services purchasing managers index increased 1.1 points in January to 59.5, higher than any month during 2016.

On-year real GDP growth in Thailand slowed 0.2 percentage points to a 1-year low of 3.0%. The economy’s average growth last year was 3.2%.

Hong Kong’s jobless rate remained steady at a low 3.3% in January.

South Korean PPI inflation doubled to 3.7% in January from 1.8% in December and 0.4% in November.

German producer prices rose 0.7% in January, lifting the 12-month rate of increase to 2.4%, most since March 2012, from 1.0% in December and negative 2.4% in the first month of 2016. Energy posted a 4.0% on-year advance in January, while all other producer prices collectively went up 1.8%.

British house price inflation according to the Rightmove index continued to recede, falling to 2.3% in February from 3.2% in January and 4.1% last August.

The CBI orders index of British industrial trends printed at a two-year high of +8 in February, up from 5 in January, zero in December and -17 in February 2016.

Finnish CPI inflation dipped 0.2 percentage points to 0.8% in January, the first decline in five months.

In February, consumer confidence rose in the Netherlands to a 102-month high. Dutch consumer spending in December was 2.7% greater than a year earlier. Consumer confidence also increased in Denmark but fell in Turkey.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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