More Data and Continuing Confusion Regarding Russian Intentions
February 18, 2022
The dollar rose 0.3% and 0.2% overnight against the Turkish lira and Japanese yen but fell 0.2% relative to the loonie, Australian dollar, Mexican peso and Chinese yuan. There’s been no net change against the pound sterling and Swiss franc, nor in the weighted DXY dollar index.
Equities sold off heavily yesterday on fears of an imminent outbreak of full-scale war between Ukraine and Russia, but scheduled talks next week between Blinken and Labrov have given pause to those fears. U.S. stock futures are up around 0.5%, and so are stock markets in the U.K., France and Switzerland. Equities fell 1.0% in Australia, 1.9% in Hong Kong, and 0.4% in Japan, however.
Ten-year sovereign debt yields have fallen three basis points in the U.K. and a basis point each in Japan and Germany, but the 10-year U.S. Treasury yield edged a basis point higher.
The price of oil continues to recede on hopes for restored Iranian exports. WTI oil fell a further 2.3% and is back below $90 per barrel. The price of gold slipped 0.4%.
Japanese CPI inflation eased in January to a 3-month low of 0.5% overall from a 2-year peak of 0.8% in December. Core inflation, which includes perishable food but not energy, fell 0.3 percentage points to a 3-month low of 0.2%. The on-year 17.9% leap in energy prices was a multi-decade high, so CPI inflation that excludes energy as well as fresh food printed more deeply in the red at minus 1.1% versus -0.7% in December and -0.5% last September. Food price inflation remained at December’s 16-month high of 2.1%.
Other inflation news around the world
- Confirmed France’s 160-month high consumer price inflation of 2.9% in January versus 0.6% a year earlier.
- In New Zealand, producer output and producer input prices respectively posted quarterly advances of 1.4% and 1.1% in 4Q 2021, lifting their year-on-year advances further from the prior quarter’s 6.2% and 7.0%.
- A record month-on-month leap in Finnish consumer prices swell the 12-month increase from 3.5% in December to 4.4% in January, which represents a 160-month high.
- Swedish CPI inflation eased back 0.2 percentage points in January to 3.7% overall and 3.9% on a core basis.
- Polish producer price inflation last month of 14.8% was 0.4 percentage points above December’s result and the most in at least 26 years.
- New house price inflation in Canada accelerated to 11.8% in January from 11.6% in December.
British retail sales growth exceeded expectations in January. The volume of sales leaped 1.9% after dropping 4.0% in December. Sales were 9.1% above their year-earlier level, the biggest such rise since last May.
Euroland’s current account surplus narrowed 4.2% on month to a seasonally adjusted surplus of EUR 22.6 billion in December. The surplus in 2021 of EUR 316.7 billion was considerably wider than that of EUR 277.3 billion in 2020 and, as a percent of GDP, increased to 2.6% from 1.9%.
Construction output in the euro area sank 4.0% on month and 3.9% on year in December, but full-2021 saw such activity recover 5.2%.
Consumer confidence weakened in February to a 16-month low in the Netherlands, a 4-month low in Denmark, and a 2-month low in Turkey but improved to a 3-month high in Belgium.
Quarterly increases last year in Swiss industrial production of 1.1% in 1Q and 7.2% in 2Q were followed by a drop of 1.1% in 3Q and only a 0.2% uptick last quarter. The 7.3% rise between 4Q 2020 and 4Q 2021 was the smallest on-year advance since the first quarter of 2021.
Canadian retail sales rebounded 2.4% last month after dropping 1.8% in December.
Indonesia’s current account recorded its first calendar year surplus in a decade during 2021. Such swung from a $4.43 deficit in 2020 to a surplus of $3.33 billion.
Still to come this Friday: U.S. existing home sales and index of leading economic indicators. The U.S. is heading into a 3-day weekend culminating in President’s Day on Monday. Canada will be on holiday then, too, for Family Day.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Blinken and Labrov, British retail sales, Euroland current account, Japanese CPI
ShareThis
