Long-Term Interest Rates Climb Higher

April 16, 2018

Softer sovereign debt prices (higher yields) are the most consistent and significant market development this Monday. The week ahead will feature the semi-annual IMF/World Bank meetings and quarterly earnings reports from many companies.

10-year sovereign debt yields are up four basis points in the U.K. and three bps each in Germany and the United States. The 10-year Japanese JGB yield edged up a basis point.

The dollar is mostly modestly lower, with declines of 0.4% against sterling, 0.3% relative to the euro, 0.2% versus the yen and Swiss franc, and 0.1% vis-a-vis the peso, yuan, and Australian dollar. The loonie is steady, and the kiwi has slipped 0.1% against its U.S. counterpart.

In China and Hong Kong whose equity markets were closed late last week, share prices fell 1.5% and 1.7%. Elsewhere, market conditions are steadier, with advances of 0.4% in India, 0.3% in Japan and Indonesia, 0.2% in Australia, and 0.1% in South Korea. The Taiwanese and Singaporean bourses slipped 0.1%. In Euorpe, the German Dax and Spanish IBEX are unchanged. Stocks in Switzerland, the U.K. and France have slid 0.4%, 0.3% and 0.1%.

West Texas Intermediate crude oil fell 1.0%, and Comex gold is 0.2% softer.

New Zealand’s Performance of Services index swung from a 10-month low of 55.3 in February to a 14-month high of 58.8 in March.

Ireland’s construction purchasing managers index dropped 1.7 points to a 4-month low of 57.5.

German wholesale prices were unchanged on month in March, keeping the 12-month rate of rise at 1.2%. On-year WPI inflation in March 2017 had been 4.7%.

The Swiss PPI/import price index dipped 0.2% on month in March, resulting in a 2-month low in the on-year pace of 2.0%. Domestic producer prices went up 1.1% on year, down from a 1.2% increase in the 12 months through February.

Indian WPI inflation edged 0.01% lower in March to an 8-month low of 2.47%.

The British Rightmove house price inflation rate settled back a half percentage point to a 2-month low of 1.6% in April. There have lately been a slew of data releases highlighting softer conditions in British housing.

Consumer prices in Cyprus posted an on-year 0.4% decline in March, matching February’s outcome.

Norway’s trade surplus contracted to NOK 14.98 billion in March from NOK 21.32 billion in February and NOK 28.76 billion in the first month of 2018.

In spite of a 0.2% month-on-month drop, Turkish industrial production still exceeded its year-earlier level by 9.9% in February. But the jobless rate was 10.8%.

Danish industrial production slipped 0.4% on month and rose 1.7% on year in March.

Scheduled U.S. data releases today feature retail sales, the Empire State manufacturing index, the NAHB housing market index and Treasury-compiled capital flows between the United States and other countries.

Atlanta Federal Reserve President Bostic speaks publicly today.

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

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