Euroland Inflation Accelerated to a 5-Month High…. Next Up: U.S. Jobs Report

May 3, 2019

The dollar rose 0.3% overnight against the euro but remains unchanged versus the yen, loonie, kiwi, and yuan. The dollar also edged up 0.2% relative to sterling and 0.1% vis-a-vis the Australian dollar and Swiss franc. Investors await the U.S. monthly jobs data for new direction.

Markets were still closed Friday in China for Labor Day and Japan for Constitution Day. Equities fell 0.9% in Indonesia  and 0.7% in South Korea but rose 0.8% in Taiwan and 0.2% in Hong Kong. Share prices in Europe have risen 0.8% in the U.K., 0.3% in Germany and 0.2% in France and Switzerland.

Ten-year U.S. Treasury and British gilt yields firmed a basis point overnight. The prices of gold and oil each slipped 0.1%.

Consumer price inflation in the euro area accelerated slightly more than forecast to a 5-month high of 1.7% in April from 1.4% in March. service sector price inflation jumped 0.8 percentage points to 1.9%, lifting core inflation by 0.4 percentage points to 1.2%.

Euro area producer prices in March, by contrast, dipped 0.1% on month and slid 0.1 percentage point to a 12-month 2.9% rate of increase. Non-energy PPI inflation fell 0.2 percentage points to 1.0%.

Swiss consumer price inflation held unchanged at just 0.7% in April (0.5% core). Swiss consumer confidence fell two index points to a 2-month low of minus 6 in April.

Total Turkish CPI inflation, which dropped from a peak in October of 25.24% to 19.67% in February, has since leveled off. The March reading was 19.71%, and April’s was at an 8-month low of 19.50%. Turkish PPI inflation, meanwhile, rose for a second straight month to 30.2% last month.

In Thailand, consumer prices rose 0.4% on month and 1.2% on year in April, while producer price inflation that month picked up to 0.7%.

Romanian producer price inflation of 5.26% in March was up from 4.8% in February and at a 5-month high.

Australia’ AIG-compiled and CBA-compiled service sector purchasing manager indices improved in April to 4- and 3-month highs. But while the AIG reading of 46.5 still conveyed fairly significant contraction, the CBA index edged back above the 50 no change line after back-to-back sub-50 readings in February and March. A score of 50 in the CBA composite PMI conveys unchanged business activity.

Ireland’s service-sector purchasing managers index fell 0.6 points to 54.7 in April, a 3-month low.

The British service-sector and composite purchasing manager indices went up 1.5 points and 0.9 points, respectively, to 2-month highs of 50.4 and 50.9. The U.K. services PMI had swung under 50 in March to a 32-month low.

Australian building permits posted the largest 12-month rate of decline in March (27.3%) since the end of 2017.

Malaysia’s first-quarter trade surplus of MYR 37.0 billion was 11% wider than a year earlier, but Brazil’s $16.58 billion January-April trade surplus showed an 8.8% on-year contraction.

Danish unemployment in March remained at 3.7% for a fourth straight month, representing its lowest level since early 2009. Norwegian joblessness averaged 3.8% last quarter.

The volume of retail sales in Hong Kong was 0.8% lower in March than a year earlier, marking the second straight month to show a 12-month contraction.

Aside from the U.S. Labor Department jobs report due in half an hour, a preliminary indication of the U.S. trade deficit will be reported today, and several Federal Reserve officials are scheduled to speak publicly. Like Herman Cain, President Trump’s other proposed nomination for the Federal Reserve Board, Stephen Moore, has withdrawn from consideration.

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




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