Focus on Hong Kong Unrest and U.K. Election

November 18, 2019

Hong Kong saw another day of violent protests and the arrest of many students trying to leave the University. Hong Kong’s stock market climbed 1.4%, nonetheless.

Elsewhere in the Pacific Rim, stock markets advanced 0.6% in China, Taiwan, and Singapore and by 0.5% in Japan. The Australian and New Zealand markets fell 0.4% and 0.3%. In Europe so far, equities are up 0.6% in Switzerland and 0.2% in Great Brtitain but down 0.2% in France and 0.1% in Germany and Italy.

A slew of opinion polls released over the weekend point to a comfortable lead for Prime Minister Johnson’s Conservative party, suggesting it will secure a parliamentary majority. Sterling rose 0.4% against the dollar and 0.3% versus the euro in response. The election is scheduled for December 12.

The dollar rose 0.2% against the yen and peso and 0.1% relative to the Swiss franc, Aussie dollar and Chinese yuan but slipped 0.1% vis-a-vis the euro, loonie, and kiwi.

Among commodities, the prices of gold and oil are down 0.7% and 0.2%.

Ten-year sovereign debt yields rose two basis points in the U.K. and U.S. and by a basis point in Germany but have edged a basis point lower in Japan.

From a data release point of view, there have been minimal significant developments this Monday.

Real GDP in Thailand ticked up only 0.1% last quarter, with personal consumption contracting for the third time in a row. On-year economic growth of 2.4% was up from 2.3% in the second quarter but down from 3.2% in the third quarter of 2018 and 5.0% in the first quarter of last year.

Unemployment in strife-riddled Hong Kong rose 0.2 percentage points to 3.1% in October.

Indonesia’s trade balance swung from a $1.76 billion deficit in October 2018 to an unexpected surplus of $161 million last month. The year-to-date deficit is 68% smaller than a year ago. Imports in October were 16.4% below their year-earlier level.

Singapore’s SGD 3.784 billion trade surplus in October was marginally smaller than September’s surplus but slight bigger than August’s total.

Foreign direct investment in China accelerated to a 7.4% 12-month increase in October but the ten-month year-to-date advance of 6.6% was down from an on-year 7.3% increase over the first seven months of 2019.

Czech producer price inflation fell a full percentage point to 0.9% in October from 1.9% in September. PPI inflation crested in 2019 at 4.3% in April.

The British Rightmove house price index fell 1.3% on month and was just 0.3% higher than a year earlier in November.

Scheduled U.S. releases today include the National Association of Home Builders housing market index and Treasury-compiled capital flows. Impeachment hearings in the House Intelligence Committee resume tomorrow with the testimony of Alexander Vindman.

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


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