Oil Down & Dollar Up Ahead of Trump’s Announcement on Iran Nuclear Deal
May 8, 2018
President Trump’s decision is scheduled for 14:00 EDT (GMT 18:00). He is widely expected to pull the United States out of the deal.
West Texas Intermediate crude oil has traded 1.4% lower and is back under the $70 per barrel level.
The dollar’s gains so far today are most pronounced against commodity-sensitive currencies like the Aussie dollar (0.8%) and the New Zealand and Canadian dollars against which it is up 0.6% each. The dollar has also risen 0.4% versus the peso, euro, and sterling. The greenback shows no net change relative to the yuan or Swiss franc and has slipped 0.2% vis-a-vis the yen.
Stocks rose in the Pacific rim, but European equities and U.S. futures have fallen. Markets closed up by 1.4% in Hong Kong, 0.8% in Taiwan and China, and 0.2% in Japan but plunged 1.9% in Indonesia. Despite this being the anniversary of V-E Day, European markets are down 06% in Germany and France, 0.5% in Switzerland, 0.4% in Spain, and 0.1% in the U.K.. A big drop of 2.0% has happened to Italian share prices due to the increasingly likely need for another election there.
Regarding the future path of Fed rate normalization, the new Richmond District President Tom Barkin endorses continuing rate hikes, while Atlanta Fed President Bostic had more cautious remarks about the urgency of raising rates.
The ten-year British gilt and German bund yields firmed 2 and 1 basis points today. Comex gold is 0.3% softer.
China’s trade surplus rebounded more than anticipated to $28.78 billion in April from a rare $4.98 billion deficit in March. The April surplus was nonetheless narrower than the surplus of $37.45 billion a year earlier, owing to a 21.5% leap in imports that eclipsed the 12.9% on-year rise of exports.
The German current account and trade surpluses widened in March to EUR29.1 billion and EUR 25.2 billion. The first-quarter current account surplus of 71.1 billion was EUR 3.1 billion larger than a year earlier. The seasonally adjusted trade surplus climbed to EUR 22.0 billion in March, surpassing the monthly average surplus of EUR 21.0 billion last quarter and the monthly averages of EUR 20.4 billion in 2017 and EUR 20.7 billion in 2016.
A 1.0% rebound in German industrial production in March failed to fully reverse February’s 1.6% drop and left average output in the quarter unchanged from the mean in the final quarter of 2017.
Japanese real household spending dipped 0.1% on month in March, its fourth straight on-month decline, and was down 0.2% compared with the level in March 2017.
In the year to March, industrial production climbed 1.9% in Hungary and 0.2% in Norway.
The British Halifax house price index slumped 3.1% on month in April. That depressed the on-year increase to 2.2% in February-April from 2.7% in the first quarter.
Swiss unemployment was at an enviably low 2.7% last month both seasonally adjusted and on an unadjusted basis.
Australian retail sales stagnated on month in March but were 2.6% greater than a year earlier.
U.S. small business sentiment according to the NIFB index edged up to 104.8 in April from 104.7 in March but remained well below readings of 106.8 in January and 107.6 in February.
Still to come: the U.S. Labor Dept JOLTS index, the U.S. IBD/TIPP optimism index, and Canadian housing starts data.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese trade balance, German industrial production and current account, Iran nuke agreement