Stocks Keep Rising but Dollar Steadies

January 3, 2018

In overnight trading, the dollar recouped 0.4% against the Swiss franc, 0.3% versus the euro, 0.2% relative to sterling and 0.1% vis-a-vis the loonie, yuan and kiwi. A particularly large 1.1% advance against the Mexican peso followed U.S. President Trump’s renewed call for a southern border wall and tighter restraints on immigration. The dollar dipped 0.1% against the yen and Aussie dollar.

Equities in the Pacific Rim advanced 1.0% in Singapore, 0.9% in Taiwan, 0.6% in South Korea, 0.4% in Hong Kong, 0.3% in South Korea and New Zealand, and 0.2% in Australia. 2017 had been a stellar year for stocks around the world, and U.S. leadership in this trend was underscored by a continuing rise in the U.S. market on the first business day of 2018.

The Japanese market remained closed for the New Year Holiday.

Equities in Europe so far today improved 1.9% in the U.K., 0.4% in Germany, France, and Spain, and 0.3% in Italy.

Ten-year sovereign debt yields settled back five and three basis points in the U.K. and Germany. The 10-year U.S. Treasury yield settled back a basis point in futures trading.

Comex gold (+0.2%) and WTI oil (+0.5%) are firmer.

Markets await several U.S. releases later today: the ISM manufacturing PMI, the NAPM New York regional PMI, construction spending, motor vehicl sales, minutes from the FOMC’s December 13 meeting, and weekly chain store sales, oil inventories, and mortgage applications.

Germany reported better-than-forecast labor market statistics, showing a further 29K drop in unemployment in December. That exceeds the 15.7K monthly average decline last year. December’s 5.5% jobless rate was 0.5 percentage points below the end-2016 level. Employment increased 1.5% in 2017.

Spanish unemployment fell less sharply in December (61.5K) than such had in the final month of 2016 (86.8K).

The Norwegian jobless rate of 4.0% in October was the same as in September but down from 4.3% last June. Icelandic unemployment fell to 2.5% in November from 3.5% in October.

The Swiss manufacturing purchasing managers index edged up 0.1 point to an 89-month high of 65.2 in December.

The British construction PMI fell 0.9 points to a 2-month low of 52.2.

Thailand’s manufacturing PMI rose 0.4 points to a 6-month high of 50.4.

Hong Kong’s retail sales grew 7.5% in the twelve months through November, their greatest on-year advance since February 2015.

Inflation remained very low in Thailand last month. Consumer prices were only 0.8% higher than in December 2016, and producer prices dropped by 0.6% in the same interval.

In contrast, Turkish consumer price inflation last month of 11.9% and PPI inflation of 15.5% remained above the 10% threshold.

Consumer confidence in Portugal remained steady in December with a reading of 2.3, but business sentiment there slipped to a score of 1.9 after four straight readings of 2.1.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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