Intensifying Market Pessimism

November 20, 2018

Equities are taking a beating around the world, with losses exceeding 1.0% in Europe, Japan, and the United States. WTI crude oil is down 2.9%, and the value of crypto currencies is crumbling. The dollar is generally firmer in this flight to safety. Ten-year U.S. treasury and German bund yields have edged lower. British gilt and Japanese JGB yields rose a basis point.

Hungarian monetary policymakers left the central bank base rate unchanged at 0.90%, its level 15 basis point cut in May 2016. A statement maintains the view that the 3.0% inflation target will be attained from mid-2019, noting lower fuel costs and only moderate wage pressures.

Released Reserve Bank of Australia minutes likewise signal no urgency to change the Official Cash Rate but do concede that the next change will likely be upward in direction.

U.S. housing starts dropped 1.5%6.0% to a 2-month low and were 2.9% lower than a year earlier in October. Building permits tumbled 6% on year.

German producer prices rose 0.3% on month and accelerated to a 3.3% 12-month rate of rise with energy jumping 1.1% on month and 9.4% on year.

South Korea’s 12-month rise of producer prices slowed to 2.2% in October.

Polish producer prices climbed 0.5% on month and at a 3-month year-on-year high of 3.2%. Polish industrial production rose 7.4% on year in October, the most since July.

The 12-month increase of Portuguese producer prices was 4.8% for a third straight time in October. That’s the highest otherwise since September 2012.

Consumer prices in Hong Kong in October matched September’s 7-month on-year high of 2.7%.

Norwegian consumer confidence last quarter was at a 6-quarter low.

Belgian consumer sentiment dropped 2 points to minus 1 in November.

French unemployment of 8.8% (ILO basis) in 3Q18 was the same as in the second quarter but down half a percentage point from the third quarter of 2017.

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



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