Firmer Dollar on this Last Day of August

August 31, 2017

The dollar climbed overnight by 0.8% against the kiwi, 0.4% relative to sterling, 0.3% versus the peso, and 0.2% vis-a-vis the euro, yen, Swissy, Canadian dollar and Australian dollar. The greenback also edged up 0.1% against the yuan. Gold dipped 0.2%.

Lots of data reported today.

Stocks were mixed overnight in Asia but are mostly up in Europe. Japan’s Nikkei rose 0.7%, but the Hang Seng fell 0.7%. European equities are up 0.8% in Spain, 0.9% in Italy, 0.7% in France, 0.6% in the U.K., and 0.5% in Germany.

Harvey is still spreading havoc in the Gulf Coast. WTI crude oil rose 0.5%.

The 10-year German bund yield firmed a basis point, while its British and Japanese counterparts are steady.

China’s government-compiled purchasing managers indices rose 0.3 points to 51.7 in manufacturing but dropped 1.1 points to 53.4 in non-manufacturing.

Japanese industrial production slid just 0.8% in July following gains of 2.2% in June and 2.2% in 2Q as a whole. Officials expect a large increase in August and retained the same assessment that production is picking up movement. That’s been their view since November, and output in July was 4.7% above its year-earlier level.

Japanese motor vehicle output posted a greatly reduced 1.4% on-year advance in July. Housing starts in July were 2.3% lower than a year earlier, their biggest on-year drop since February. But construction orders soared 14.9%.

German retail sales volume reversed June’s 1.3% increase, falling 1.2% in July but were still 2.7% greater than a year earlier. German seasonally adjusted unemployment declined 5K in August, and the jobless rate was 5.7% for a fourth month in a row. Employment in July was 1.4% higher than a year earlier.

A 4.0% on-year increase in energy prices lifted Euroland CPI inflation to 1.5% in August from 1.3% in the prior two months, but core inflation held steady at 1.2%. The euro area’s unemployment rate in July stayed at June’s 9.1%, which is the lowest since February 2009. However, youth unemployment rose a tenth of a percentage point to 19.1%. Construction output in the euro area fell 0.5% in June after a 0.2% dip in May but rose 1.2% in 2Q compared to 1Q. The level of construction output in June was 3.4% greater than a year earlier.

In the year to August, consumer prices rose 1.2% in Italy and 0.9% in France. 

In the year to July, producer prices climbed 1.5% in France and 1.2% in Hungary but fell 7.8% in Iceland.

Consumer confidence in the U.K. improved two points to a reading in August of minus 10, which was better than analyst forecasts.

Spanish retail sales posted their first monthly decline in six months during July, a drop of 0.4% that left such 1.1% higher than a year earlier.l

In the second quarter, real GDP rose 1.1% in Poland, 0.6% in Denmark and 0.3% in Portugal. On-year growth in those economies was respectively 3.9%, 2.7% and 2.9%.

South African producer price inflation eased 0.4 percentage points to 3.6% in July.

As expected, the Bank of Korea left its base rate unchanged at 1.25%, the level since a 25-basis point cut in June 2016.

Thailand recorded an $8.3 billion current account surplus last quarter, 45% smaller than in 1Q.

In the year to July, Australian M3 money expanded 6.7%, and private credit grew 5.3%. Australian business investment grew 0.8% last quarter.

Scheduled U.S. data to be released today include personal income and spending, the PCE price deflator, pending home sales, the Chicago regional purchasing managers index, and weekly jobless insurance claims. Canada reports June and second-quarter GDP.

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

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