Watching Impeachment Developments and Digesting Data

September 26, 2019

The dollar fell overnight by 0.5% against the kiwi, 0.4% relative to the Aussie dollar, and 0.1% versus the yen and loonie, but it also rose 0.2% against sterling and the euro as well as 0.3% vis-a-vis the Swiss franc. The yuan and peso are unchanged.

Wednesday’s rebound in U.S. share prices carried over into most but not all stock markets overseas. Exceptions included China (down 0.9%), Australia and New Zealand (each down 0.5%). Equity market gains in Asia included Indonesia (1.4%), India (1.0%), Hong Kong (0.4%) and South Korea (0.3%). European equities so far are up 1.0% in the U.K., 0.9% in Switzerland, 0.7% in Italy and France, and 0.4% in Germany.

Ten-year sovereign debt yields have dipped 2 basis points in the U.S. but risen a basis point each in Germany and the U.K.. The price of oil and gold is hardly changed.

Investors await the release of U.S. GDP data, an advanced estimate of the U.S. trade deficit, pending home sales and the KC Fed monthly manufacturing survey.

German consumer confidence unexpectedly rose 0.2 index point to a 4-month high.

South Korean consumer confidence jumped 4.4 index points to a 5-month high in September.

But Swedish consumer sentiment and business sentiment fell this month to its lowest readings in 81 and 75 months, respectively.

Austria’s manufacturing purchasing managers index dropped 2.8 points to an 83-month low of 45.1, and the input price sub-index fell to a 42-month low.

Mexico’s economic activity index dipped 0.1% on month but posted the first year-on-year rise in July since March.

Icelandic unemployment of 4.4% in August represents a 3-month high.

Sweden recorded a SEK 5.4 billion trade deficit in August, 32.5% smaller than its year-earlier deficit.

Swedish PPI inflation decelerated for a fifth straight time in August, reaching a 35-month low of 1.4%. Back in September of 2018, such was at 10.1%.

Danish retail sales were only 0.9% greater in August than a year earlier.

M3 money growth in the euro area accelerated to 5.7% in August and recorded an average 5.1% increase in June-August. The narrower M1 money aggregate’s growth climbed to 8.4% from 7.8% in July and 7.2% in June. Private credit growth and bank lending to non-financial firms also picked up in August.

The central bank in the Philippines cut its overnight reverse repo rate by an as-expected 25 basis points to 4.0%. This was the third reduction since May and contrasts with a combined 175 basis points of increase implemented between May and November of last year. A released statement cites slower price pressure since the previous policy review and a weak growth outlook. Well-anchored expected inflation also provided leeway to augment monetary stimulus.

Hong Kong’s trade deficit shrank to HKD 28.0 billion in August from HKD 52.1 billion a year earlier as imports plunged 11.1%. Hong Kong is especially endangered by U.S.-Sino trade frictions.

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


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