September and Third Quarter in Figures
September 29, 2018
Central bank policy rates were raised during the third quarter in the United States, U.K., and Canada but left unchanged in Japan, Switzerland and Euroland. Nevertheless, long-term interest rates climbed noticeably in all six of those economies. Thus, 10-year differentials between the U.S. and the other countries didn’t shift all that much. Moreover, the squeeze on the U.S. Treasury ten-year minus two-year yield curve width is proceeding very slowly, declining from 46 basis points at mid-2018 to 40 bps at the end of August and 38 bps now.
The dollar strengthened significantly during September against the yen and Swiss franc but did not post meaningful changes against the other currencies shown in the table below. Earlier this quarter, the dollar had risen appreciably against sterling, the Australian and New Zealand currencies, the Chinese yuan and some other emerging market currencies. Share prices in the U.S., Switzerland and Japan outperformed those in the euro area and Great Britain last quarter, but the bulk of the strength in the United States happened prior to September. Regarding commodity prices, oil rose solidly in September but not enough to drown out the losses earlier in the quarter. Gold continued to lose growth both in September and 3Q as a whole.
| 10-Yr Yield | 09/28/18 | Chg vs Aug 31 | Chg vs End-2Q |
| U.S. | 3.06% | +20 Basis Point | +20 Basis Points |
| Germany | 0.47% | +15 | +17 |
| Japan | 0.12% | +3 | +10 |
| U.K. | 1.57% | +15 | +29 |
| Canada | 2.42% | +20 | +26 |
| Switzerland | -0.01% | +14 | +11 |
| CB Policy Rate | 09/28/18 | Chg v Aug 31 | Chg vs End-2Q |
| Fed funds target | 2.00/2.25% | +25 Basis Points | +25 Basis Points |
| ECB deposit rate | -0.40% | 0 | 0 |
| BOJ policy rate | -0.10% | 0 | 0 |
| BOE Bank Rate | 0.75% | 0 | +25 |
| Swiss 3M Libor | -1.25/-0.25% | 0 | 0 |
| FX | 09/28/18 | % Chg in USD | Pct Chg in $ |
| EUR/USD | 1.1604 | -0.0% | +0.7% |
| USD/JPY | 110.68 | +2.4% | +2.7% |
| USD/CHF | 0.9817 | +1.3% | -0.8% |
| GBP/USD | 1.3033 | -0.6% | +1.3% |
| AUD/USD | 0.7405 | -0.5% | +2.5% |
| NZD/USD | 0.6781 | -0.2% | +2.3% |
| USD/CAD | 1.2926 | -0.9% | -1.6% |
| USD/CNY | 6.8686 | +0.6% | +3.7% |
| Equities | 09/28/18 | Chg v Aug 31 | Chg vs End-2Q |
| S&P 500 | 2914 | +0.4% | +7.2% |
| Nasdaq | 8046 | -0.8% | +7.1% |
| Djia | 26458 | +1.9% | +9.0% |
| Dax | 12247 | -0.9% | +0.5% |
| Nikkei | 24120 | +5.5% | +8.1% |
| Ftse | 7510 | +1.0% | +1.7% |
| Canada TSE | 16073 | -1.2% | -1.3% |
| Swiss SMI | 9088 | +1.3% | +5.6% |
| Commodities | 09/28/18 | Chg v Aug 31 | Chg v End-2Q |
| Oil, $ per barrel | 73.25 | +4.9% | -1.4% |
| Gold, $ per ounce | 1191.50 | -1.3% | -4.9% |
Copyright Larry Greenberg 2018. All rights reserved. No secondary distribution without express permission.
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