Stocks and Oil Firmer but Dollar and Fixed Income Asset Prices Lower

April 12, 2019

The dollar has weakened 0.7% against the Aussie dollar, 0.6% relative to the kiwi, 0.5% versus the euro, 0.4% vis-a-vis the loonie, 0.3% against the yen, peso and sterling and 0.2% versus the Swiss franc and Chinese yuan.

The price of WTI oil strengthened nearly 1% overnight and is again above $64.00 per barrel.

The yields on 10-year sovereign debt yields jumped 17 basis points in Italy, 5 bps in Spain, 7 bps in France, 6 bps in Germany, the Netherlands, and U.K., 5 bps in Canada, and 4 bps in the United States.

Share prices rose 0.7% in Japan, 0.5% in Hong Kong, 0.9% in Australia, and 0.4% in India and South Korea. In Europe, equities have risen 0.6% in Germany and 0.3% in France but are flat in the U.K., and the DOW has strengthened 0.8%.

China released stronger-than-forecast data:

  • Due to an unexpected 7.6% on-year slide in imports juxtaposed against a 14.2% rise in exports, the $32.64 trade surplus in March was eight times greater than February’s surplus and $38.4 billion higher than a deficit of $5.77 billion a year earlier. First-quarter exports were 1.4% larger than a year earlier, outperforming a 4.8% on-year drop in imports.
  • New yuan loans last month were nearly double the size of February’s result. On-year growth in the M2 and M1 money stocks respectively accelerated to 8.6% from 8.0% and to 4.6% from 2.0%.

Industrial production in the euro area recorded an on-year decline in February for a fourth consecutive month, but the 0.3% size of the drop was less than in the three prior months. Between January and February, industrial output dropped 0.2% in Euroland, 0.4% in Germany, 0.7% in the Netherlands and 1.1% in Spain but rose by 0.4% in France and 0.8% in Italy.

German wholesale price inflation accelerated 0.2 percentage points in March to a 3-month high of 1.8% but was less than half the recent high of 4.0% in October.

U.S. import prices rose 0.6% last month due to another outsized jump (6.4%) in fuel costs. However, the price of imported non-fuel items slid 0.2% on month and 0.8% on year.

The Reuters/U. Michigan monthly U.S. consumer sentiment index fell back 1.7 points in April according to the preliminary estimate. The index had printed recently as low as 91.2 in January and 93.8 in February.

CPI inflation in India rose 0.3 percentage points to 2.86% in March, still well down from 4.9% last June. On-year growth in Indian industrial production slowed to a 20-month low in February of only 0.1%.

Final consumer price statistics for Spain confirmed the preliminary estimates of a 0.4% monthly rise and a 4-month high in the year-on-year comparison of 1.3%.

Singapore GDP grew 1.3% over the four quarters through 1Q19, down from 4.7% a year earlier.

New Zealand’s manufacturing purchasing managers index retreated 1.5 points in March to 51.9, indicating the weakest growth in that sector since a reading of 51.2 last July.

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

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