A Din of Unease

March 6, 2017

U.S. President Trump accused his predecessor of wiretapping his phone during the election campaign.

Far right nationalist parties continue to augment their voter support in The Netherlands and France ahead of respective elections scheduled for March 15 and April 23rd.

The CEO of the troubled Deutsche Bank admitted it’s been going in the wrong direction and announces a big reorganization and plan to boost capital.

Italy’s retail purchasing managers index edged down to a 5-month low of 45.5, and Euroland’s retail PMI dipped 0.2 points to a 3-month low of 49.9.

Greek fourth quarter GDP growth was revised sharply downward to show a quarterly contraction of 1.2%, most since the third quarter of 2015, and an on-year slid of 1.1% adjusting for changes in the number of working days.

China’s government revised down its targeted growth rate in 2017 to 6.5% from a range of 6.5-7.0%.

The Fed is now broadly expected by investors to raise its federal funds rate target at mid-month. The ECB Governing Council meets on Thursday this week amid some calls for it to signal a less accommodative policy bias. New forecasts from the central bank are due, but the majority view is that policy will not be modified yet.

The dollar is mostly higher, with gains of 0.3% against the euro, kiwi, and sterling, 0.2% versus the loonie and 0.1% against the Swiss franc. The dollar is down 0.2% against the yen and peso and 0.1% lower relative to the yuan.

Share prices in Europe are down 1.2% in Greece, 0.4% in Germany, France, and Italy and 0.3% in Great Britain where investors await Chancellor Hammond’s first budget presentation on the 8th.

The Japanese Nikkei closed 0.5% lower, but stock markets rose 0.8% in India, 0.5% in China,and  0.4% in Taiwan, Indonesia and Hong Kong.

The price of West Texas Intermediate crude oil dropped 0.8% to $52.91 per barrel, but most metal prices are up including a 0.4% rise in Comex gold to $1,231.40 per troy ounce.

The 10-year German bund yield fell three basis points, while its British counterpart edged a basis point higher. The 10-year Japanese JGB is flat.

Non-oil purchasing manager indices rose in February in Saudi Arabia, the U.A.E., and Egypt to 18-, 17- and 6-month highs of 57.0, 56.0 and 46.7. Lebanon’s private PMI remained at a one-year high of 47.7 seen in January.

Germany’s construction PMI in February rebounded 2.1 points to a 2-month high of 54.1 after touching a 5-month low in January. Input price pressures persisted in the latest month.

The Sentix gauge of investor sentiment toward the euro area economy climbed 3.3 points to a 115-month high in March, with strength in both perceived current conditions and future expectations.

Austrian on-year WPI inflation accelerated to 7.4% in February.

Retail sales in Australia rose by an as-expected 0.4% in January. This was the best result in three months and kept on-year sales growth at 3.2%.

Building permits in New Zealand only rebounded 0.8% last month from January’s tumble of 7.9%.

U.S. factory orders data will be released later today.

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

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