Comparatively Steady Dollar to Start Week
February 10, 2020
The dollar is unchanged from Friday closing levels against the yen, Swiss franc, loonie, and kiwi, and it has edged a mere 0.1% lower relative to the euro, Aussie dollar and peso. Bigger drops can be seen of 0.3% versus the yuan and 0.4% relative to sterling.
Share prices fell 0.5-0.8% in a number of Pacific Rim stock markets and are down but by less in Germany, France and the U.K.. Changes in the prices of gold and oil are minuscule.
Ten-year Japanese, German, and U.S. sovereign debt yields are down 2, 1, and 1 basis points. President Trump’s U.S. federal budget proposal for the fiscal year beginning in October cuts non-defense spending around 5%, bumps defense up marginally, yet still shows a whopping $4.8 trillion deficit.
Investors continue to keenly watch the spreading coronavirus outbreak. Reported worldwide cases now top 40k, resulting in over 900 deaths. The IOC has had an uncanny knack for locating the Olympic games in awkwardly timed places — Sarajevo in 1984, Rio in 2016, Berlin in 1936, Moscow in 1980, Greece in 2004, and now Tokyo this year, which has the second largest number of Coronavirus cases.
Data releases today have yielded a mixed bag.
Chinese consumer prices jumped 1.4% on month in January, a 47-month high due to food cost pressures and resulting in a 99-month on-year increase of 5.4% versus 4.5% in December and 1.7% in January 2019. PPI inflation last month of 0.1% was positive for the first time since last May versus a recent low of -1.6% in the year to October.
Japan’s current account surplus in 2019 of JPY 20.06 trillion was slightly wider than the surplus of JPY 19.22 trillion a year earlier and reflected declines of 6.2% in merchandise exports and 5.6% in goods imports. Japanese bankruptcies were 16.1% greater in January than a year earlier, which is the biggest advance in over a half year. The economy watchers index improved to a 4-month high, but but this diffusion index of service sector worker perceptions remained depressed with a value of 41.9. Moreover, the forward-looking outlook economy watchers index fell to a 4-month low last month. Finally, Japanese bank lending growth slowed to an on-year 1.9% advance in January from 2.0% last quarter and 2.1% in the summer of 2019.
Like Germany and France, Italy recorded a deep decline in industrial production during the final month of 2019. Output slumped 2.7% on month (most in 23 months) and 4.3% on year (most since December 2018).
Greek industrial production dropped 4.6% on year in December after 12-month declines of 9.0% in November and 0.4% in October. Greek production recorded an average 0.6% slide last year, the first decline since 2014. In Finland, a 0.6% December-over-December rise in industrial production was the smallest 12-month gain in 7 months.
The Bank of France’s monthly business sentiment indices in January held steady at December’s 3-month low in manufacturing, ticked a point higher to a 2-month high in services, and climbed to a 5-month peak in construction. Central Bank officials project a 0.3% quarterly GDP growth rate in the current period.
The Sentix gauge of investor sentiment toward the euro area economy fell 2.4 points to 5.2 in February but remains well up from its recent low of -16.8 last October.
Swiss unemployment increased to 2.6% last month from 2.3% in both November and December.
Norwegian CPI inflation picked up 0.4 percentage points to a 3-month high of 1.8% last month, but PPI deflation deepened to -3.9%. Danish consumer prices were just 0.7% higher last month than a year earlier.
Canadian housing starts rose 8.8% on month and to a 4-month high in January. Building permits in December rebounded from November’s 3.5% decline with a 7.4% increase.
Minnesota Senator Klobuchar’s opinion poll support in New Hampshire, which holds its Democratic Party presidential primary tomorrow, has climbed into third place, behind front-runner Sanders and Pete Buttigieg.
The South Korean film, Parasite, won the 2019 Oscars for best picture and best director.
Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese CPI and PPI, coronavirus, Japanese current account