Natural Disasters, Manmade Disasters and Central Bank Meetings Top News

September 20, 2017

Puerto Rico is being hammered by a Cat 4 hurricane with 155 MPH winds.

Mexico is reeling from a 7.2 magnitude earthquake that struck yesterday. Around 25o people confirmed dead.

U.S. Republican senators are scrambling to pass a repeal and replace healthcare bill by monthend that’s even more dysfunctional than previous efforts.

In a speech to the U.N., President Trump threatened the destruction of North Korea.

An FOMC announcement is scheduled for 14:00 EDT, to be followed by Janet Yellen’s press conference and the distribution of new macroeconomic forecasts. The Fed is expected to provide more clarity to a plan to reduce its bloated balance sheet.

The Bank of Japan is also holding a monetary policy meeting that is not expected to change its stance. There will be a press conference by Governor Kuroda on Thursday.

The dollar is weaker, and commodity prices have strengthened. The U.S. currency fell overnight by 0.9% against the kiwi, 0.6% relative to the Australian dollar, 0.4% relative to the loonie, 0.3% vis-a-vis the peso and yen, 0.2% against the Swiss franc and sterling and 0.1% relative to the euro and yuan. WTI crude oil rose 1.2% to $50.08 per barrel, and Comex gold climbed 0.6% to $1,318.60 per ounce.

Stocks in the Pacific Rim climbed 1.0% in New Zealand, 0.6% in Hong Kong, 0.3% in China and 0.1% in Japan but fell 0.5% in Taiwan and 0.2% in Singapore and South Korea. In Europe, Spain’s stockmarket is down 0.8%, depressed by another separatist referendum in Catalonia. Equities are up 0.2% in France and 0.1% in the U.K. and Switzerland but down 0.2% in Italy and 0.1% in Germany.

Ten-year German bund and British gilt yields have dipped a basis point.

Japan recorded a JPY 114 billion customs trade surplus in August, which represents a JPY 150 billion improvement from a JPY 35 billion deficit a year earlier. There was lively 2-way commerce, with exports and imports respectively 19.9% and 13.8% higher than a year earlier. The seasonally adjusted JPY 367 billion trade surplus was the largest since February, and both exports and imports were 1.2% higher than in July.

Several economies reported current account data. New Zealand‘s deficit narrowed to 2.8% of GDP in the second quarter from a gap of 3.1% in 1Q. The Greek surplus of EUR 1.57 billion in July was 86% greater than in June. Likewise, Hungary’s second-quarter surplus of EUR 1.75 billion exceeded the first-quarter surplus by 84%. And Portugal’s July surplus of EUR 787 million followed a minuscule 13 million euro surplus the month before.

British retail sales volume jumped 1.0% on month and 2.4% on year in August, which was substantially better than had been forecast.

German producer prices firmed 0.2% on month and accelerated to 2.6% on year, a 3-month high, in August. The 2.7% on-year rise in energy costs was similar to a collective 2.6% advance in non-energy components of the PPI.

Malaysian CPI inflation rose a half percentage point to 3.7% last month.

South African CPI inflation edged up 0.2 percentage points to 4.8% in August.

Data on U.S. existing home sales and weekly oil inventories will be released today.

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

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