Dollar Down a Bit, Stocks Go a Little Higher
March 29, 2018
The dollar has slipped 0.4% against the yen, 0.3% relative to the Aussie currency, 0.2% versus the peso, yuan and loonie, and 0.1% vis-a-vis the euro and Swiss franc. The dollar also edged up 0.1% against sterling overnight.
British real GDP growth last quarter was confirmed to have risen 0.4%, down from a 0.5% increase in the third quarter of 2017. On-year growth of 1.2% was the lowest since the spring of 2012 and significantly less than full-2017 average growth of 1.8%. In the final quarter, there was a 0.4 percentage point drag on growth from net foreign demand even though the current account deficit in the quarter of GBP 18.443 billion was smaller than forecast. The current account deficit for all of 2017 totaled GBP 82.9 billion or 4.1% of GDP.
Equities in the Asia climbed 1.3% in Singapore, 1.2% in China, 0.7% in South Korea and 0.6% in Japan. Government offices in India were closed for the Mahavir Jayanti holiday. Share prices in New Zealand and Australia fell by 1.0% and 0.5%.
Some other markets like Mexico and Norway are shut for Holy Thursday, which commemorates the Last Supper. But most European markets are open. There, equities have rebounded 0.7% in Germany, 0.6% in Spain, 0.5% in France, 0.3% in the U.K., and 0.1% in Italy.
The leaders of North Korea (Kim Jong Un) and South Korea (Moon Jae-in) will hold an unprecedented summit on the South Korean side of the DMZ on April 27. This is before President Trump is supposed to meet with Kim Jong Un.
Comex gold at $1,330 per ounce is steady, and WTI crude oil has edged just 0.2% lower to $64.27 per barrel.
Ten-year German bund and Japanese JGB yields edged a basis point higher, while the 10-year British gilt is unchanged.
German CPI inflation rebounded in March back to January’s 12-month pace of 1.6% from 1.4% in February. Inflation of energy, services, and food all accelerated.
German labor statistics revealed a 19K drop in the number of unemployed workers in March following declines of 23K in February and 14K in January. The associated jobless rate was 5.3% after consecutive 5.4% readings in January and February. On-year growth in employment was 1.4% in January-February, down from 1.5% in 2017.
Japanese retail sales bounced up 0.4% on month in February and were 1.6% higher than a year earlier.
British consumer confidence rose 3 points to a 10-month high of negative 7 in March. British M4 money growth slowed in February by 0.2 percentage points to 4.1%. Bank of England estimates show 63.9K mortgage approvals in February and GBP 1.6 billion of new consumer credit. Finally, the Nationwide British house price index slipped on month for a second straight time in March and was only 2.1% higher than a year earlier. That’s the smallest 12-month rate of increase since last August.
The Swiss economic barometer, akin to an index of leading economic indicators, printed at a 7-month low of 106.0 in March, down from 108.4 in February.
Italian PPI inflation eased 0.1 percentage point to 1.6% in February. Austrian PPI inflation also slipped 0.1 percentage point to 1.2% in February.
In the year to February, industrial production and retail sales in Portugal posted respective increases of 2.1% and 3.7%. Both 12-month gains were less than recorded in January.
The Czech National Bank had raised its two-week repo rate in early February to 0.75% but did not change such further at today’s policy review.
Turkish GDP expanded 1.8% on quarter and 7.3% on year in the final quarter of 2017. Full-2017 growth of 7.4% was more than twice as steep as the 3.2% growth seen in 2016.
In the year to February, South African producer price inflation decelerated to 4.2% from 5.1% on year in January. M3 growth sped up to 6.89% from 5.83%, and private domestic credit expansion also accelerated to 5.74% from 5.54%.
In the year to February, Australian M3 money rose 3.8%, and private credit there went up 4.9%.
New Zealand had 5.7% more building permits granted in February than in January.
U.S. weekly jobless insurance claims fell by 12K to just 215K last week and averaged 224.5K over the last four weeks.
U.S. real personal consumption was unchanged in February, another disappointing result after a 0.2% drop in the first month of this year. But inflation measured by the personal consumption price deflator and the core PCE deflator each accelerated 0.1 percentage point in the month to 1.8% and 1.6%, respectively. Weak personal consumption wasn’t reflective of more savings, as the savings rate remained low at 3.4%. Personal income rose 0.4% for a third straight month.
Canadian PPI inflation slowed 0.2 percentage points to 1.9% in February. Excluding energy, producer prices were 0.7% above the year-earlier level.
Canadian monthly GDP suffered a 0.1% dip in January, the first decline since August. GDP was 2.7% greater than in January 2017. A 0.7% monthly drop of industrial production was a major factor behind the dip in GDP.
Still ahead: Release of the U.S. U. Michigan/Reuters consumer sentiment index and the Chicago regional purchasing managers index. Also Chilean monetary policy makers are holding a review today and will reveal its decision late today.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British GDP and current account, German unemployment and CPI, Italian PPI, Japanese retail sales, U.S. personal income and consumption