Little Happening in Markets on this U.S. Holiday

January 20, 2020

U.S. markets will be closed today for Martin Luther King Jr’s birthday. In the absence of U.S. leadership, the dollar has been mostly steady, with no net change against the yen, loonie, or peso, overnight upticks of 0.2% against the renminbi, kiwi, Aussie dollar and sterling, a 0.1% relative to the euro and a 0.1% downtick versus the Swiss franc.

In equity markets overnight, share prices close up 0.7% in China and Indonesia and 0.5% higher in South Korea but down 1.0% in India and 0.7% in Indonesia. Stocks rose 0.2% in Japan and Australia. The German Dax shows a similarly sized gain, while stock markets in France, the U.K., and Spain are marginally lower.

WTI oil has firmed 0.7% overnight, while gold is steady.

Among 10-year sovereign debt yields, the Japanese JGB is flat, and the German bund and British Gilt are a basis point higher.

German producer prices rose 0.1% last month, trimming their on-year decline by half a percentage point to -0.2%. Such compares to a 2.7% on-year rise in December 2018. Over the most recent 12-month period, energy fell by 2.4%, while other producer prices collectively rose 0.4%.

The November drop in Japanese industrial production was revised to 1.0% from 0.9%, and output was also 8.2% lower than in November 2018. By comparison, production in the third quarter of 2019 had been just 0.8% weaker than a year earlier. Capacity utilization recorded an on-year plunge of 10.4% in November, and capacity was 0.5% beneath its year-earlier level.

The Greek current account deficit in November of EUR 1.392 billion was about 4% smaller than a year earlier, and the January-November deficit of EUR 2.0 billion was down from EUR 3.7 billion a year earlier.

Industrial confidence in Norway sank to a fourth-quarter reading of 0.7 from 2.3 in 3Q, 5.0 in 2Q and 8.9 in the final quarter of 2018.

Britain’s Rightmove house price index rebounded 2.3% this month on the clarified political situation, and this lifted its 12-month rate of increase more than threefold to 2.7%.

Hong Kong’s jobless rate edge 0.1 percentage point higher to 3.3% in December, representing a 33-month high.

Sri Lanka’s manufacturing purchasing managers index fell 1.7 points to a 6-month low of 54.3, but the services PMI printed at a two-year high of 60.2 in December.

Bank Indonesia and the Bank of Japan are holding their first monetary policy reviews of 2020. Bank Indonesia’s revelation is due shortly, and the Bank of Japan’s announcement will come Tuesday and be accompanied by an updated Outlook for Economic Growth and Prices.

The Eurogroup is meeting today, and the annual World Economic Forum in Davos, Switzerland kicks off tonight. America’s next presidential inauguration ceremony occurs one year from today. The highly influential Iowa Caucus is two weeks from today.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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