Equities and Dollar Steady but Pandemic Not Going Away
August 10, 2021
Covid trends keep worsening. U.S. daily cases hovering at 125k, and hospitalization and death rates are rising too. Global deaths closing in on 4-1/3 million, and a number of countries including China have tightened restrictions against social activities.
Overnight dollar changes were mostly confined to a range of plus or minus 0.2%.
Share prices Tuesday rose 1.2% in Hong Kong and 1.0% in Singapore and China but fell 0.9% in Taiwan, 0.6% in Indonesia, and 0.5% in South Korea. The Japanese Nikkei edged up 0.2% following Monday’s holiday, and the German Dax so far is 0.2% firmer, too.
U.S. stock futures are little changed. The 10-year Treasury yield is steady, too, while its German and British counterparts are a basis point softer.
The price of West Texas Intermediate oil climbed 1.7%, trimming its recent losses. That of gold firmed 0.3% overnight.
The Delta Variant is taking its toll on consumer and business confidence:
- The German and Euroland ZEW investor expectation indices tumbled sharply to nine-month lows in August.
- Australia’s NAB-compiled index of business confidence swung to a 14-month low of -8 in July from +11 in June and +20 in May. Business conditions in July printed at +11 following readings of +24 in June and +37 in May.
- U.S. small business sentiment dropped 2.8% in July below June’s 8-year high.
- Indonesian retail sales sank 12.8% on month in June, slashing its 12-month rate of increase to 2.5% compared to 14.7% in May and 15.6% in April.
- Swedish household spending increased 0.5% on month in June, down from a 4.5% advance in May.
Austrian industrial production recorded a second consecutive 1.8% monthly decline in June, dampening its 12-month rise to a 4-month low of 11.3%.
Factory output in South Africa fell for a third straight month in June, this time by 0.7%. The year-on-year increase of 12.5% was down from 36.3% in May and 88.1% in April.
Industrial production in Finland dropped 2.0% on month and to a 4.1% on-year rise in June from 7.9% the month before. Belgian industrial production, on the other hand rebounded 0.9% in June (and 23.2% on year) after slumping 2.3% in May.
Industrial production in Sweden experienced the largest monthly advance(1.9%) in eight months but the smallest year-on-year increase (16.7%) in three months.
Among released price data, Norwegian producer price inflation accelerated to a record high of 43.4% in July, and CPI inflation that month of 3.0% returned to a 3-month peak.
Czech CPI inflation of 3.4% last month was its highest in a year, but Hungarian CPI inflation slowed to a 4-month low of 4.6%. Danish CPI inflation was 0.1 percentage point lower than in June at 1.6%, constituting a 3-month low.
Japan’s current account surplus of JPY 905 billion in June was considerably greater than the year-earlier JPY 148 billion surplus. Japan ran a JPY 10.3 trillion seasonally adjusted current account surplus in the first half of 2021, similar to that of JPY 10.5 trillion in the second half of 2020.
On-year growth in Japanese bank lending of 3.0% in the second quarter was sharply below that of 6.2% in the first quarter.
Turkish unemployment fell to a 37-month low of 10.6% in June.
Filipino GDP contracted 1.3% last quarter, its first quarterly drop in a year, but the year-on-year advance of 11.8% was still the most in 130 quarters.
Australian building permits fell on month for a third straight time. The slide of 6.7% in June resulted in a cumulative drop of 18.7% from March.
U.S. productivity growth slowed more sharply than anticipated last quarter to 2.3% annualized from the first quarter and to 1.9% compared to the same quarter a year earlier. Over the four quarters through 2Q 2021, unit labor costs went up only 0.1%, down from a 2.3% on-year advance in the first quarter and a jump of 6.0% between 2Q 2019 and 2Q 2020.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German ZEW expectations index, Japanese current account, U.S. Covid cases, U.S. productivity and unit labor costs
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