All Markets Back Open but Still in Yearend Mode

December 27, 2018

Today is the oasis between Christmas and New Year market closures. There are but a few data releases and no meaningful central bank policy reviews to report. Whereas some stocks in the Pacific Rim rebounded, those markets in Europe and U.S. futures are down.

To wit, equities climbed 3.9% in Japan, 1.9% in Australia, 1.7% in Taiwan, 1.1% in Singapore, 1.0% in Indonesia, 0.8% in New Zealand, and 0.4% in India, but markets in Hong Kong and China declined by 0.8% and 0.6%. The South Korean Kospi and Paris Cac are unchanged. Equities have faltered 1.6% so far in Germany, 1.1% in Switzerland, 1.0% in Italy, 0.9% in Greece, 0.8% in the U.K. and 0.6% in Spain.

Ten-year sovereign debt yields rose 7 basis points in Greece and 2 bps in Great Britain but are down 4 bps in the United States, 2 bps in Italy and 1 basis point in Germany. Japan’s 10-year JGB yield remains steady at 0.01%.

Yesterday’s rally in the price of WTI oil has been followed by a renewed 1.2% slide today.  Gold is little changed, but copper slipped more than 0.5%.

The dollar shows overnight losses of 0.4% against the yen and Swiss franc and 0.3% relative to the yuan and euro but gains of 0.2% versus the Canadian, Australian and New Zealand dollars. The dollar edged 0.1% higher against sterling and is unchanged on balance versus the peso.

Japanese housing starts and construction orders in November recorded on-year declines of 0.6% and 10.7%, respectively.

Chinese industrial profits posted their first on-year decline last month since December 2015, a drop of 1.8%. As recently as July, such had been up 16.2% year-on-year. There was still an 11.8% on-year increase in January-November, but that’s down from an average 17.1% advance for just January-July.

Hong Kong’s trade deficit in November of HKD 45.0 billion was 13.4% greater than a year earlier and similar to the average monthly deficit of HKD 46.7 billion in the first ten months of 2018.

South Korean consumer sentiment recovered 1.2 index points to 97.2 in December but remained well below this year’s high-water mark of 110 way back in January.

The Swiss ZEW expectations index, a measure of investor confidence in that economy, rebounded to a 4-month high of -22.2 in December from a roughly 4-year low in November of -42.3 in October.

Austria’s manufacturing purchasing managers index fell 0.9 points to a 2-month low in December and was just 0.1 index point better than October’s 25-month low. Export demand was the weakest since August 2016.

Spanish retail sales increased 0.4% in November, resulting in a 1.4% year-on-year rise, second most since March.

Consumer confidence in Finland this month slid another 2.2 index points to 16.1, the lowest reading since October 2016.

Czech consumer confidence rose to a two-month high in December even as business sentiment fell to a 5-month low.

Several U.S. economic data will be reported today: new home sales, consumer confidence, the FHFA monthly house price index, and weekly jobless insurance claims.  Friday’s data calendar for both the United States and elsewhere is rather hefty.

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


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