Sterling and European Share Prices Falter

October 14, 2019

In this important week for the fate of Brexit, sterling dropped 0.9% against the dollar overnight.

On a day with holiday closures in the United States (Columbus Day), Canada (Thanksgiving), and Japan (Health Sports Day), the dollar otherwise advanced 0.7% against the kiwi, 0.2% versus the euro, and 0.5% relative to the Australian dollar but slipped 0.3% against the loonie, 0.3% relative to the peso and 0.1% against the yen and Swiss franc.

Share prices climbed 1.2% in China, 1.1% in South Korea and New Zealand, 1.0% in Taiwan, and 0.8% in Hong Kong. In contrast, key European stock markets are down 0.5% or more.

West Texas Intermediate crude oil fell 2.1%. Gold firmed 0.6%.

Ten-year British gilt yields are down 8 basis points, and 10-year German bund yields are 3 basis points lower.

Industrial production in the euro area advanced 0.4% in August, a touch more than forecast, but the 12-month rate of decline still increased to 2.8%, the deepest drop since December.

German wholesale prices recorded their third on-year drop in a row, a 1.9% decline in September that was the greatest decrease in 40 months.

Ireland’s construction purchasing managers index in September fell 5.4 points to 48.3, which was the first sub-50 reading since August 2013. Ireland is exposed by Brexit uncertainty.

China’s trade surplus of $39.65 billion in September was almost 20% greater than anticipated due to a greater 8.5% on-year drop in imports.

Indian wholesale price inflation decelerated sharply to 0.33% in September from 1.1% in August and July and 3.2% as recently as April.

On-year GDP growth in Singapore during the third quarter of 0.1% matched the second-quarter result and otherwise was the smallest increase since the second quarter of 2009. In the year through the first quarter of 2018, GDP had risen 4.6%, by contrast.

Finnish consumer prices in September posted a slightly smaller 0.9% year-on-year rise than seen in August.

In the 12 months to August, industrial production dropped 3.6% in Turkey, edged 0.3% higher in Hungary, and slumped 6.6% in Romania.

Chinese officials want to talk further before signing President Trump’s so-called Phase I trade deal.

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

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