Dollar and Equities Strengthening on Final Day of April
April 30, 2018
The dollar shows overnight gains of 0.6% against the kiwi and peso, 0.5% versus the Australian dollar, 0.4% relative to the euro and sterling, and 0.3% vis-a-vis the yen, loonie and Swiss franc.
The Japanese and Chinese markets were closed today for Showa Day and Labor Day, respectively. Markets in China will remain shut tomorrow and be joined by several other countries in observance of May Day. Japanese Golden Week holidays resume later in the week with Constitution Day on Thursday and Greenery Day on Friday.
Elsewhere in the Pacific Rim today, share prices climbed 1.0% in Singapore and Taiwan, 0.9% in South Korea and New Zealand, 1.8% in Hong Kong, 1.3% in Indonesia, 0.6% in India and 0.5% in Australia. Equities so far today in Europe show advances of 0.6% in Greece, 0.5% in Spain, 0.4% in Switzerland and the U.K., 0.3% in France and 0.1% in Germany and Italy.
West Texas Intermediate crude oil (-1.0%) and Comex gold (-0.7%) have each decline pretty significantly.
The 10-year German bund yield is a basis point firmer, whereas the comparable 10-year British gilt has dipped a basis point. The 10-year JGB is flat at 0.05%.
Typical monthend, there have been quite a few data releases around the world. Geopolitical news and first-quarter corporate earnings reports have supported cautious optimism.
German retail sales unexpectedly fell 0.6% in both volume and nominal terms during March. The volume of sales dropped 0.8% last quarter and were only 1.3% greater than in March 2017. Easter exerted a distortion.
German consumer prices in six reporting states more or less stagnated on month in April. Inflation rates edged lower in North Rhine Westphalia, higher in Saxony, and remained the same as in March for Bavaria, Brandenburg, Baden-Wuerttemberg, and Hesse.
The government-authorized composite purchasing manager index in China edged another 0.1 point higher in April to 54.1 following a 1.1-point advance in March. Manufacturing dipped 0.1 point to a reading of 51.4, but non-manufacturing rose 0.2 points to 54.8.
Austria’s manufacturing purchasing managers index remained unchanged at March’s 10-month low of 58.0. The subindex for orders slipped to a 19-month low in April.
In the euro area, money and credit growth slowed last month. M3 money posted a 3.7% on-year advance in March, down from 4.2% in February and 4.6% in January, largely because of softer expansion in the narrow M1 component. M3 in the first quarter was 4.2% higher than a year earlier. Private sector credit posted on-year growth of 2.5%, down from 2.8%, while credit to the public sector slowed to 3.9% on year from 5.2% in February.
The Swiss KOF index of leading economic indicators rebounded 0.2 points in April to 105.3 but remained down from 108.4 in February and a reading of 111.3 in December.
Italian consumer price inflation decelerated 0.3 percentage points to 0.5% in April.
According to a CBI survey, British private sector growth in February-April was the weakest in 19 months.
In the year to March, producer prices rose 1.3% in Austria and 0.6% in Greece but fell 2.2% in Malaysia.
On-year growth in Portuguese industrial production stayed level in March at 1.7%. Retail sales posted a larger 5.1% 12-month increase.
In the year to March, South Korean retail sales grew 7.0%, but industrial production was 4.3% below the March 2017 level. Norwegian retail sales climbed 0.9% on year in March.
South African M3 money growth slowed to 6.4% in March from 6.9% posted in the year to February. Private credit expanded 5.96%, accelerating from 5.74% in February and 5.54% in January.
Australian M3 money and private credit were respectively 3.8% and 5.1% greater than a year earlier in March.
The unemployment rates of Denmark and Portugal were 4.1% and 7.4% in March.
On-month increases in March of U.S. personal income (0.3%) and personal spending (0.4%) roughly matched expectations. Inflation according to the PCE price deflator accelerated marginally less than projected to 2.0% overall and 1.9% for core items.
Canadian producer prices jumped 0.8% on month, lifting the 12-month rate above 2% to 2.3%. Energy accounted for the bulk of the acceleration. Likewise a 5.3% on-month and 21.1% on-year surge in crude oil was responsible for a higher rate of raw material price inflation. Excluding crude oil, the raw material prices were just 2.0% higher than a year earlier.
Still Ahead: U.S. pending home sales, the Chicago regional purchasing managers index, and the Dallas Fed manufacturing index. A meeting of EU finance ministers is taking place today as well.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese purchasing manager survey, Euroland money and credit growth, German retail sales and CPI, U.S. personal income and spending
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