Disappointing Data and Inflammatory Remarks from Pompeo ahead of U.S. Jobs Report

September 4, 2020

After Thursday’s selloff, financial markets have quieted ahead of the U.S. August labor market report. Share prices in the Pacific Rim fell 3.1% in Australia, 2.0% in New Zealand, 1.3% in Hong Kong, 1.1% in Japan, and 0.9% in China, but European markets bounced up 1.2% in Spain, 0.4% in Italy, and 0.3% in the U.K. and France while extending losses in Germany by just 0.4%.

The dollar experienced its best week in a few months but is essentially marking time this morning with dips of 0.4% against the peso, 0.2% versus the loonie, and 0.1% relative to the kiwi and yuan, upticks of 0.3% against the Swiss franc and 0.1% vis-a-vis the euro and sterling.

The yen and Aussie dollar are unchanged. So are 10-year German bund, British gilt and Japanese JGB yields.

Among key commodity prices, WTI oil and gold show daily advances of 0.9% and 0.4%.

Tensions between the Trump and Xi have seemingly risen. U.S. Secretary of State Pompeo gloated that several governments have joined the U.S. effort to confront Beijing, and Xi said Chinese policies will not be dictated by foreigners.

German industrial orders rose only half as much as expected in July, climbing 2.8% on month but falling 7.3% on year and remaining 8.2% below February’s level.

Euroland’s construction purchasing managers index recorded a second consecutive decline, dropping to a 3-month low of 47.8 in August versus 53.5 last February.

The British construction purchasing managers index dropped 3.5 index points below July’s 57-month high to a 3-month low of 54.6 in August. New car sales in the U.K. were 5.8% below their year-earlier level in August and have recorded a drop of 39.7% in January-August from a year earlier. Scant progress continues to be reported from the British/EU Brexit talks.

Australian retail sales grew 3.2% on month in July. Analysts were expecting a gain of around 5%.

Filipino industrial production in July was 14.8% weaker than a year earlier.

South Korea’s $26.62 billion current account surplus in January-July was 8.9% narrower than a year earlier.

Despite a monthly jump of 27.4%, Singaporean retail sales were still 8.5% lower in July than a year earlier.

Czech retail sales rose 1.8% on month and 3.0% on year in July, its biggest 12-month increase since February.

Over the past 24 hours, U.S. Covid-19 cases and deaths have climbed 44k and 1.05k. Total U.S. deaths of 191k represent 21.9% of the global total.

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


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