Monthend Data But Little Market Change Ahead of Tonight’s Speech by President Trump

February 28, 2017

The dollar is unchanged against the euro, yuan and peso, down 0.4% against the yen, but up 0.4% relative to the Swiss franc. The greenback edged up 0.2% versus the loonie and sterling and 0.1% vis-a-vis the Australian dollar.

Stocks in the Pacific Rim closed up 0.4% in China, 0.3% in South Korea and 0.1% in Japan but down 0.4% in Singapore and 0.5% in Hong Kong. Equities are so far unchanged in the U.K., Greece and Switzerland, down 0.3% in German and 0.1% in France, but up 0.8% in Spain and 0.3% in Italy.

Gold and oil slipped 0.4% and 0.2% to $1,254.20 per ounce and $53.92 per barrel.

10-year sovereign debt yields rose two basis points in Germany and Britain.

Brazil’s Carnival holiday entered its second day.

Hungary’s central bank left its key interest rate unchanged at 0.90% as forecast.

Japanese industrial production fell unexpectedly in January for the first time in a half year. Such dropped 0.8% on month but was 3.2% greater than a year earlier.

Motor vehicle production in Japan posted on-year growth in January of 3.8%, down from 4.2% in December and 6.6% in November.

Japanese retail sales advanced 0.5% on month and 1.0% on year in January, close to what analysts were anticipating.

Small business sentiment in Japan fell somewhat more deeply below the 50 level in February with a reading of 47.7 after 48.3 in January and 48.8 in December.

On-year growth in Japanese housing starts accelerated to a 4-month high of 12.8% in January, but the 12-month rise in construction orders shrank to 1.1% from 7.1% the month before.

French real GDP grew twice as fast last quarter (0.4%) as it had in 3Q16 and recorded similar expansion in calendar 2016 (1.1%) as in 2015 (1.2%). Quarterly growth in 4Q was entirely attributable to improved personal consumption and business investment.

French CPI inflation unexpectedly dipped to 1.2% in February. Producer prices were 3.8% higher in January than a year earlier. Consumer spending in January rose 0.6% and was 1.4% greater than a year earlier.

Italian CPI inflation accelerated to 1.5% in February from 1.0% in January. Core inflation was only 0.6%.

Consumer confidence in Britain dipped a point to a 2-month low of minus 6 in February.

The Swiss index of leading economic indicators shot up 5.2 points to a reading of 107.2 in February, best in slightly over three years.

Swedish real GDP last quarter rose 1.0% from 3Q16 and 2.3% from a year before. Sweden posted a SEK 1.5 billion trade surplus in January, nearly twice the size of the January 2016 surplus. Retail sales growth quickened in January to 1.3% on month and 2.2% on year. Swedish producer price inflation picked up to 8.2% last month.

Australia released several statistics. New home sales dropped 2.2% on month in January. That same month saw on-year growth in M3 money and private credit of 7.0% and 5.4%. The current account continued to shrink in the final quarter of 2016, printing at just A$ 3.853 billion which implies a 0.2 percentage point boost to GDP growth in the period.

Business sentiment in New Zealand weakened 5.1 points to a reading of 16.6 in February.

South African M3 and private credit expansion each accelerated in the first month of 2017, with on-year gains of 7.9% and 5.6%.

Dallas Fed Reserve President Kaplan prefers to hike interest rates sooner rather than later. It’s a sentiment expressed publicly by many Fed officials lately.

U.S. fourth quarter real GDP grew 1.9% on quarter at an annualized rate. That’s unrevised from the prior estimate but only about half as much as the 3.5% pace last summer. The personal consumption price deflator accelerated in on-year terms to 1.4% (1.7% core).

Canadian producer prices rose 0.4% on month and 2.3% on year in January.

Still ahead: U.S. Case Shiller index of house prices, the Chicago PMI, and the Richmond Fed manufacturing index. Today’s main event will be Trump’s speech to congress.

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

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