Awaiting Jay Powell’s Speech

November 28, 2018

Fed Chairman Powell delivers a speech before the economic club of NY later today. Such is attracting evenĀ  more interest than might be expected because President Trump has just escalated his criticism of Powell, calling him a bigger problem than China.

In other news today,

  • U.S. GDP growth last quarter was confirmed at 3.5%, the earlier estimate. Consumer spending and government spending were not quite as robust as measured initially, but business investment was revised up. Net exports exerted a 1.9 percentage point drag, while inventories enhanced growth by 2.25 percentage points. The PCE price deflator was 2.2% higher than in 3Q17.
  • The preliminary estimate of the U.S. October trade deficit, $77.25 billion was unexpectedly wider than September’s imbalance.
  • U.S. new home sales plunged 8.9% to a 31-month low in October and was 12.0% lower than a year earlier.
  • The Richmond Fed manufacturing index slid an index point lower to +14 and was 15 points less in November than in September.
  • German consumer confidence slid to an 18-month low.
  • Austria’s manufacturing purchasing managers index bounced 1.1 points to a 2-month high of 54.9 following three straight declines.
  • Italian producer price inflation accelerated to 5.8% in October, most since September 2008, from 4.7% in September and a 2018 low of 1.4% in April.
  • The Swiss ZEW expectations index, a gauge of investor sentiment, fell 3.2 points to negative 43.3, lowest since February 2015 and down from +52 at the end of 2017.
  • On-year M3 money growth remained at 4.4% in the euro area in October and averaged 3.7% over the last 3 reported months. Loans to non-financial firms and for home mortgages were 3.9% and 3.3% greater in October than a year earlier.
  • Construction work completions in Australia fell 2.8% last quarter, more than reversing a rise of nearly 2% in the second quarter.
  • British shop prices were 0.1% greater than a year earlier in November.
  • The 12-month rate of increase in Irish retail sales settled back to 5.8% last month from 6.4% in September but was still the third largest on-year advance this year.
  • Swedish retail sales in October, by contrast, fell 1.1% on month and 0.1% on year.
  • Business confidence in South Korea rebounded two index points to a reading in November of 73, marking the third such score in the past four reported months.

The dollar shows modest net overnight changes ahead of Powell’s speech.

Share prices are higher in North America and also advanced 1.4% in Hong Kong, 1.1% in China and 1.0% in Japan, but European markets are little changed.

WTI oil has fallen back 0.5%. Gold is little changed.

Ten-year Japanese JGB and U.S. Treasury yields are a basis point higher, while their British counterpart has dipped a basis point.

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

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