Dollar Eased but Share Prices and Sovereign Debt Yields Rose Overnight

April 3, 2019

The dollar slipped 0.4% against the euro and 0.2% relative to the yen, loonie, yuan, and Swiss franc. Larger dollar drops of 0.8% and 0.6% occurred versus the Australian and New Zealand dollars, and a 0.1% uptick happened versus the yen.

Share prices in the Pacific Rim strengthened 1.2% in China, Hong Kong and South Korea, 1.0% in Singapore and and Japan and 0.7% in Australia. The British Ftse shot up 3.7% on indications that Labour leader Corbyn might be persuaded to support PM May’s Brexit plan. Equities are also up 1.2% in Germany and Spain.

10 year sovereign debt yields advanced 8 basis points in the U.K., 6 bps in Germany, 4 bps in the U.S., and 2 bps in Japan.

Gold and oil prices are little changed.

The ADP estimate of private U.S. jobs growth last month, 129K, is much lower than forecast.

Euroland’s composite purchasing mangers index slipped to a 2-month low in March of 51.6 despite a 4-month high in the services PMI of 53.3.

Japan’s composite PMI, a gauge of private sector operating conditions, sunk to a 30-month low of 50.4, indicating a near stall in the economy.

But China’s services PMI jumped 3.1 points to a 2-month high of 54.4, lifting the composite index to a 9-month high of 53.9.

Despite a 3-month low in Russia’s services PMI, stronger manufacturing growth produced a 4-month high of 54.6 in that economy’s composite PMI.

South Africa’s private PMI fell to a 4-month low of 48.8 from 50.2 the month before.

Hong Kong’s private PMI moved further below 50 to a 3-month low of 48.0, and so did Lebanon’s private PMI, which dropped to 46.3. Sub-50 readings equate to contraction.

Singapore’s private PMI score of 51.8 in March after 48.2 in February was the best since December.

Australia’s CBA-compiled composite and service sector PMI readings were at 49.5 and 49.3 in March. They had initially fallen below the 50 no change threshold in February.

The National Bank of Poland as expected kept its reference interest rate unchanged at 1.5%, which is the level since a pair of half percentage point declines in January and March of 2015.

Australian retail sales jumped 0.8% in February, the largest monthly increase in 15 months, and that resulted in a 2.8% on-year advance. Australia also reported a record trade surplus of A$ 4.801 billion in February. The 2-month surplus of A$ 9.15 billion was 3.4 times greater than the January-February 2018 surplus.

Russian GDP was 2.7% greater thanĀ  year earlier in 4Q18 and averaged 2.3% in 2018 as a whole.

Retail sales volume in the euro area went up 0.4% in February and beat expectations in the year-on-year comparison, which rose to 2.8% from 2.2% in January and 0.5% in December.

Investors await the U.S. non-manufacturing PMI results.

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

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