Stocks Lifted by Rising Confidence that a Big U.S.-Chinese Trade Deal Is Almost at Hand

March 4, 2019

Share prices advanced Monday by 1.1% in China, 1.0% in Japan and Singapore, and 0.9% in Hong Kong. In Europe, stock markets have thus far strengthened 0.7% in the U.K., 0.6% in France but only 0.2% in Germany.

Ten-year sovereign debt yields rose a basis point in Japan and Britain but slipped 2 basis points in Germany and a basis point in the United States.

To start the new week, WTI oilrebounded 0.5% in $56.05 per barrel, while gold sank another 0.9% to $1287.90 per troy ounce.

The dollar traded up 0.7% versus the loonie, 0.3% vis-a-vis the euro, and 0.2% relative to the Swiss franc and sterling. At the same time, the dollar has edged 0.1% lower relative to the yen, yuan, kiwi and Australian dollar.

There are holiday closures for Carnival in Brazil and Maha Shivaratri in India.

Producer prices in the euro area rose 0.4% on month in January, most since August, leaving the 12-month rate of increase unchanged at 3.0%. Energy rose 0.4% on month, while all other producer prices collectively went up 0.3%.

The Sentix gauge of investor sentiment toward the euro area rose 1.5 points in March, breaking a run of six consecutive months that saw deterioration, but the index printed below zero (-2.2) for a fourth straight time. Such had crested last August at +14.7.

Japan’s monetary base recorded on-year growth of 4.6% in February, down from 4.7% in January, 5.6% in the final quarter of 2018 and 7.8% last year as a whole.

Released Australian data today revealed a 2.5% on-month January rise of building permits, the first month-on-month increase since September, the the 12-month rate of decline (28.6%) became even larger. Gross corporate profits and inventories respectively rose 9.6% and 1.2% last quarter compared to a year earlier, and new home sales sank 6.7% in December, their biggest monthly drop in six years.

South Korea’s manufacturing purchasing managers index fell 1.1 points, printing at a 44-month low of 47.2, which was the fourth straight month below the 50 level that separates improving from deteriorating operating conditions.

Similarly, Taiwan’s manufacturing PMI dropped 1.2 points to a 42-month low in February of 46.3, its fifth sub-50 score in a row.

The British construction purchasing managers index fell 1.1 points to 49.5 in February, lowest since the weather-distorted reading of March 2018. Not including that distortion, last month’s reading was the weakest in 17 months.

The global purchasing managers index for manufacturing slipped in February to a 32-month low.

Turkish CPI inflation slowed further in February to a 6-month low of 19.67%. The year-on-year advance had crested last October at 25.24%. PPI inflation dropped a bit more than 3 percentage points to a 7-month low of 29.59%.

In the year to February, consumer prices and producer prices in Thailand respectively rose 0.7% and fell by 0.8%.

Romanian PPI inflation slowed to 3.9% in January from 4.5% at end-2018.

Malaysia’s trade surplus widened to a 3-month high in January of MYR 11.5 billion and was 18.5% greater than a year earlier.

The New York regional PMI and U.S. construction spending data get reported later today.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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