Dollar Strengthens at Start of Fresh Week

May 11, 2020

Global cases of Covid-19 now exceed 4.2 million and have resulted in 284,156 confirmed deaths. A third of the cases have been found in the United States, but the push to reopen the country on a uneven and gradual basis has continuing momentum.

Overnight gains in the dollar amount to 0.8% against the kiwi, 0.6% versus the yen, peso, Aussie dollar and sterling, 0.4% relative to the loonie, 0.3% vis-a-vis the yuan but just 0.1% against the euro and Swiss franc.

Share prices climbed 1.5% in Hong Kong and Taiwan, 1.3% in Australia, 1.1% in Japan and 0.9% in Indonesia but show losses so far of 1.0% in France, 0.4% in Germany and Spain, 0.3% in the U.K., and 0.2% in Switzerland. U.S. stock futures are lower, too.

Ten-year German bund and British gilt yields rose two basis points, while the 10-year Treasury yield remains unchanged at 0.69%.

The price of WTI oil settled back 2.6%, while gold has fallen 0.9%.

Industrial production during March in Italy posted 30-year and record month-on-month and year-on-year plunges of 28.4% and 29.3%.

Ireland’s construction purchasing managers index sank 24.4 index points to +4.5, shattering the previous all-time low reading of 25.7 during the Great Recession.

Dutch consumer sentiment dropped 25 index points to a 79-month low of -27.

In China, which was first to feel the Covid-19 outbreak and first to emerge from such, motor vehicle sales in April were 4.4% greater than a year earlier. Such follows a string of 21 straight declines including March’s 43.3% on year plunge.

Chinese bank lending last month of CNY 1.7 trillion exceeded expectations. M2 money growth accelerated a percentage point to an 11.1% on-year pace.

Norwegian CPI inflation ticked up 0.1 percentage point in April from March’s 80-month low of 0.7%. But Norwegian producer prices dropped 3.3% on month, deepening on-year PPI deflation to -16.1%.

Danish consumer prices were unchanged in April both compared to March and versus a year earlier. Denmark’s current account swung to a surplus of DKK 4.07 billion in March from a DKK 2.9 billion deficit a year earlier.

Romania experienced a EUR 4.45 billion trade deficit in the first quarter, 20% wider than a year earlier.

Greek industrial production was 0.6% greater than a year earlier in March, breaking a 5-month streak of year-on-year declines.

Turkish unemployment fell 0.2 percentage points to 13.6% in February and was 1.1 percentage points below its year-earlier level.

Malaysian unemployment jumped half a percentage point to an 11-year high of 3.8% in March.

A summary of the Bank of Japan Board’s review of monetary policy on April 27 revealed some committee members fearing a depression, but the majority stuck with existing interest rate settings while augmenting quantitative stimulus in part.

The Conference Board’s monthly U.S. employment trends index will be reported later today.

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




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