Dollar and Yen Fell in Tandem
October 10, 2019
The dollar and yen dropped overnight by 0.6% against the New Zealand and Australian currencies, 0.5% relative to the euro, 0.3% versus the Swiss franc and peso, 0.2% relative to the loonie and sterling and 0.1% against the yuan.
Ten-year U.S. Treasury and Japanese JGB yields are unchanged, whereas their German and British counterparts increased by 3 and 4 basis points so far today.
Share prices advanced today by 0.8% in China, 0.5% in Japan, and so far by 0.3% in France and Spain but dropped 0.8% in India and 0.5% in New Zealand.
The price of gold is unchanged, but that of WTI crude oil has risen 0.8%.
U.S. CPI inflation remained steady at 1.7% last month, and core CPI excluding food and energy held at a 1-year high of 2.4%. Energy tanked 1.4% on month and 4.8% on year. Total consumer prices were unchanged from August’s levels.
Price data released in other economies revealed
- A 33-month low in Japanese domestic PPI inflation of minus 1.1% and a deeper 9.3% on-year plunge in import prices.
- A dip in Norwegian CPI inflation to 1.5% in September, which is a 22-month low.
- A 40-month low in Norwegian PPI inflation of -10.7%.
- A 0.1 percentage point rise of Swedish CPI inflation to a 2-month high of 1.5%.
- A 3-month low in Czech CPI inflation of 2.7%.
- A 3-month high of 0.5% in Danish CPI inflation.
- Portuguese consumer prices were 0.1% lower than in September 2018, their third straight year-on-year decline.
- Irish CPI inflation in September, although still below 1.0%, increased to a 3-month high of 0.9%.
- And a 17-month high of 2.2% in the 12-month advance of food prices in New Zealand.
Domestic private machinery orders in Japan fell 2.4% in August and a 12-month plunge of 14.5%. Such and experienced a 6.6% monthly decline in July. Export orders rebounded 21.3% but were still 9.2% below their year-earlier level.
The German current account surplus of EUR 16.9 billion in August was EUR 1 billion smaller than forecast, but the accrued January-August surplus of EUR 164.9 billion was 18% wider. Seasonally-adjusted merchandise exports dropped 1.8% on month and 3.9% on year.
Several British economic indicators were reported today. Industrial production fell 0.6% on month and 1.8% on year, which was weaker than forecast. Construction output, on the other hand, beat expectations with a 4-month high on-year increase of 2.4%. The goods and services trade deficit narrowed to GBP 1.546 billion in August as the merchandise trade shortfall managed to stay below GBP 10 billion again. The Royal Institute of Chartered Surveyors’ monthly house price balance index improved to a 3-month high of -2% and was considerably above the 2019 low reading in February of -27%. And finally, NIESR’s monthly estimate of British GDP growth for August was -0.1%, resulting in a 0.3% on-year increase for June-August.
One of today’s most eagerly awaited events was the release of minutes from the European Central Bank’s September 11-12 meeting. The Governing Council downgraded its outlooks for both economic growth and inflation and undertook a package of complementary stimulus measures to ensure favorable conditions for sustaining growth and moving inflation closer to its medium-term target. Forward guidance reaffirmed Euroland’s need for a highly accommodative monetary stance for a prolonged period of time.
The National Bank of Serbia held a policy meeting today that retained the key policy interest rate at 2.5%, noting subdued inflation, slower global growth, trade tensions, and a Serbian credit rating upgrade by Moody’s. The NBS interest rate was cut by 25 basis points each earlier this year at meetings in July and August, and two rate cuts had also bee done both last year and in 2017.
French industrial production dropped 0.9% on month in August and was 1.4% lower than its year earlier level. Italian industrial production rose 0.3% in August but experienced an 8-month low in its year-on-year movement to minus 1.8%.
Romanian real GDP expanded 1.0% on quarter in 2Q19, resulting in a smaller year-on-year rise of 4.4%.
Brazilian retail sales edged only 0.1% higher in April and were just 1.3% greater than the August 2018 level.
New U.S. jobless insurance claims were again historically very low last week, dropping 10k to just 210k.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: ECB Account, German current account, Japanese machinery orders, National Bank of Serbia, U.S. CPI