Long-Term Interest Rates Edge Higher

April 26, 2021

Ten-year sovereign debt yields this Monday are three basis points higher in the U.K. and United States, two bps higher in German and up a basis point in Japan.

The dollar is marginally softer but above its overnight low on a weighted basis. The key EUR/USD and USD/JPY relationships are unchanged. The peso is also unchanged. The dollar has firmed 0.2% against the Swiss franc but has slipped 0.4% versus the Aussie dollar, 0.3% relative to the New Zealand dollar, and 0.2% against the Canadian dollar and Chinese yuan. The dollar is also 0.1% softer versus sterling.

The price of West Texas Intermediate crude oil fell 1.5% overnight, and that of gold edged down 0.1%.

New Zealanders are observing ANZAC Day today.

In stock market action, share prices rose 1.1$ in India, 0.4% in Japan and 1.0% in South Korea but fell 1.6% in China. U.S. stock futures suggest a small dip at the open.

Germany’s IFO business climate index failed to improve as much as forecast in April, edging just 0.2 points higher to a 22-month high of 96.8. Expectations of the economy in six months actually retreated 0.8 point to a 2-month low, reflecting Covid concerns and supply chain bottlenecks. Current conditions rose further to a 14-month high.

Business sentiment and consumer confidence in the Czech Republic climbed in April to 14- and 7-month highs.

Producer prices in Spain jumped 2.5% on month and accelerated on a year-on-year basis to 6.3%, a 49-month high in March from only 0.6% in February.

Finnish PPI inflation rose to 6.7% in March from 2.0% in February, -0.8% in January and -2.9% at the end of 2020.

Industrial production in Singapore recorded a greater-than-forecast 12-month 7.6% rate of increase in March despite a month-on-month decline.

Japanese corporate service price inflation posted the first on-year increase (0.7%) since a 12-month increase in the year to September 2020.

Japan’s index of leading economic indicators was revised a point lower to 98.7 in March, but that still was the best reading in 2-1/2 years. The index of coincident economic indicators was revised upward.

The Turkish lira rebounded 1% against the dollar but remains depressed and vulnerable at 8.3 per dollar.

The menu of U.S. economic data releases today includes durable goods orders and the Dallas Fed manufacturing index.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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