Thursday Losses in the Dollar Extended Slightly

May 11, 2018

The dollar slipped by a further 0.4% against sterling, 0.3% relative to the Swiss franc, Aussie dollar and yuan, 0.2% versus the euro, loonie and kiwi, and 0.1% vis-a-vis the yen. Yesterday’s report of U.S. consumer prices was a tad lower than feared.

Stocks rose today in Asia but dropped a bit in Europe. With a date (June 12) and location (Singapore) set for the historic meeting between Trump and Kim, Asian markets perceive less geopolitical tension. But Europe’s attention is fixed on the widening estrangement between the United States and its European allies in the wake of the U.S. abrogation of the Iran nuclear deal.

Equities rose 1.2% in Japan, 0.9% in Singapore, 0.8% in Hong Kong, India and Indonesia, and 0.6% in South Korea, New Zealand, and Taiwan. U.S. futures point to a higher open, but in Europe, stocks have fallen by 0.3% in Germany and France and 0.1% in the U.K. and Switzerland.

The ten-year U.S. Treasury yield is unchanged at 2.96%. The 10-year German bund is also flat. Their British and Japanese counterparts have respectively ticked a basis point higher and a basis point lower today.

West Texas Intermediate crude oil is trading firmly but unchanged on the day at $71.38 per barrel, and Comex gold has edged 0.2% higher to $1,325.10 per ounce.

Chinese on-year growth in M2 money of 8.3% in April accelerated somewhat less than forecast, and new yuan lending of CNY 1.18 trillion was similar to the previous month’s result.

Japanese M2 money growth of 3.3% in April compares to 3.2% on-year in the first quarter, 3.9% in the final quarter of 2017, and 4.0% in 2017 as a whole.

Real GDP in Hong Kong last quarter grew 2.2% from the 4Q17 level, most since 1Q11, and 4.7% from a year earlier, most since 2Q11. Activity was led by personal consumption, up 3.1% on quarter and 8.6% on year, as well as exports, up 4.8% on quarter and 5.2% on year.

Indonesia’s current account deficit last quarter of $5.5 billion equaled 2.15% of GDP, up from 1.7% in GDP in 2017 as a whole.

Retail sales in Singapore rebounded 2.3% on month in March but were 1.5% less than their year-earlier level.

New Zealand’s manufacturing purchasing managers index jumped 5.8 points to 58.9 in April, implying the quickest improvement in factory conditions since the first month of 2016. A separate New Zealand data release showed a 2.3% on-year rise in food prices for April, most since December.

Australian home loans fell 2.2% in March following monthly declines of 0.2% in February, 1.0% in January, and 2.3% in December.

In the 12 months to April, consumer prices climbed 1.1% in Spain, 0.8% in Denmark, and 0.4% in Portugal.

Between March of 2017 and 2018, industrial production fell 9.9% in Ireland but rose 4.1% in Romania.

The Central Reserve Bank of Peru retained a 2.75% policy interest rate.

The Central Bank of Sri Lanka, which last month had cut its Standing Lending Facility Rate by 25 basis points, left such unchanged at 8.5% and its Standing Deposit rate of 7.25% also unchanged after this month’s review. Officials decided the current stance is still suitable.

Still ahead: Canadian April labor market statistics and U.S. import prices and U. Michigan/Reuters consumer sentiment index.

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

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