Another Possibly Terrorist Shooting

March 18, 2019

As the last business week ended on Friday, investors learned of a terrorist shooting by a neo-nazi at a mosque in New Zealand that killed 50 people, and today brings news of another shooting some 11,670 miles away on a tram in The Netherlands that is also believed to be the work of a terrorist.

Monday had otherwise opened pretty calmly in financial markets.

  • The dollar is 0.4% firmer against the yen and up 0.1% vis-a-vis sterling but down 0.3% relative to the euro and Australian and New Zealand dollars and by 0.2% versus the loonie, Swiss franc, Mexican peso and Chinese yuan.
  • Ten-year German bund and Japanese JGB yields are unchanged at 0.08% and -0.5%, respectively. The 10-year British gilt yield is a basis point lower, while the 10-year U.S. treasury yield has edge up a basis point in overnight futures action.
  • Among commodities, gold has firmed 0.2%, while oil is 0.1% softer.
  • Share prices in the Asia closed up 2.5% in China, 1.9% in Hong Kong, 0.8% in Indonesia, 0.7% in Taiwan and 0.6% in Japan. European equities thus far have risen 0.9% in Italy and 0.6% in the U.K. and Spain, but the German Dax is down by a modest 0.2%.

There have been only a couple of data releases of note.

Japan’s customs clearance trade balance experienced its first surplus in February since last June, totaling JPY 116 billion or roughly $1 billion. This followed a JPY 290 billion deficit in January. The unadjusted surplus flipped to a JPY 339 billion surplus from deficits of JPY 1.415 trillion in January and JPY 14 billion in February 2018. Trade with Japan’s Asian neighbors was distorted by the lunar new year holiday. Japan’s surplus against the United States widened.

The slump in Japanese industrial production during January was revised modestly to 3.4% from 3.7% reported initially. Production, which had risen only 1.0% in 2018 after 3.1% advance in the prior year, posted an increase of just 0.3% in January from a year earlier. Industrial productive capacity in January was unchanged, while capacity usage dived 4.7% below December’s level.

Euroland’s seasonally adjusted trade surplus widened EUR 1.0 billion to a 9-month high in January of EUR 17.0 billion and compared to a monthly average surplus in 2018 of EUR 16.1 billion.

New Zealand’s purchasing managers index for service sector activity slipped back to a 2-month low in February of 53.8 from an 8-month high in January of 56.2.

The British Rightmove house price index rose 0.4% in March but recorded its first year-on-year drop (0.8%) since November.

Czech producer price inflation accelerated in February to a 4-month high of 3.6%.

In the U.S., the monthly housing index compiled by the National Association of Home Builders will get released later today. While there are no central bank monetary policy reviews today, there are a lot of them this week, and that list includes the Federal Reserve, Bank of England, Bank of Russia, and Swiss National Bank.

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

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