Marking Time Ahead of U.S. Data and Xi/Putin Meeting
September 15, 2022
There’s been little financial market reaction from data released overnight. Investors are looking ahead to a slew of U.S. releases later today, including retail sales, import prices, industrial production, the Empire State and Philly Fed monthly manufacturing surveys, and weekly jobless insurance claims. Markets will also be keeping an eye on face-to-face talks later today between the Russian and Chinese presidents.
The weighted DXY dollar index is unchanged so far today. The U.S. currency has fallen 0.4% against the Swiss franc and 0.1% versus the euro but also risen 0.3% relative to the Japanese yen, Chinese yuan and sterling, 0.2% vis-a-vis the Mexican peso, and 0.1% relative to the Australian dollar, New Zealand dollar and Turkish lira.
Equity markets in the Pacific Rim fell 1.2% in China, 09.7% in India and 0.4% in New Zealand and South Korea but rose by 0.4% in Hong Kong and Indonesia and 0.2% in Japan and Australia. Similarly, share prices in Europe and U.S. futures are narrowly mixed.
Ten-year sovereign debt yields have firmed four, two, and one basis points in the U.S., Germany and Britain.
Prices for WTI oil, gold and Bitcoin are currently down 0.7%, 0.6%, and 0.2% thus far today.
A U.S. railroad strike has been tentatively averted. A teachers strike in Seattle was suspended.
Euroland’s seasonally adjusted trade deficit swelled to EUR 40.3 billion in July, with exports dipping 1.7% on month but imports climbing 1.5%. It was the tenth straight seasonally adjusted deficit and the largest of the streak. The unadjusted deficit swung from a EUR 20.7 billion surplus in July 2021 to a EUR 34.0 billion deficit one year later and from a surplus of EUR 121 billion in January-July 2021 to a deficit of EUR 177 billion over the first seven months of this year. Net energy imports year-to-date were EUR 224 billion greater than a year before.
Hourly labor costs in the euro area were 4.0% greater this quarter than a year earlier. This a tad less than the 4.2% on-year increase in 2Q but compares to a 0.4% on-year decline in 2Q 2021.
In price news reported today,
- French CPI inflation in August was revised upward by 0.1 percentage point to a monthly 0.5% advance and a 12-month 5.9% rate of increase versus 1.9% recorded in the year through August 2021.
- German wholesale prices have flattened, with monthly changes of 0.1% in both June and August flanking a 0.4% drop in July. The 12-month rate of WPI increase has slowed from 23.8% in April to 18.9%, which still dwarfs 12.3% in August 2021.
- CPI inflation in Argentina leaped 7.0% on month in August following jumps of 7.4% in July and 5.3% in June, resulting in a greater-than-forecast 78.5% on-year pace, most in 31 years.
- August CPI inflation in Poland has been confirmed at the preliminary estimate of 16.1%. That’s up from 5.5% a year earlier and the greatest 12-month increase in 310 months.
Like Euroland, Japan’s chronic trade surplus has been decimated by elevated costs for imported energy. A record JPY 2.817 trillion customs clearance deficit was posted in August, compared to a shortfall of JPY 653 billion a year earlier. The seasonally adjusted deficit last month of JPY 2.371 trillion was 10% larger than July’s deficit.
Australian August labor statistics were close to analyst expectations. The jobless rate rose 0.1 percentage point back to June’s 3.5% level but was a full percentage point below the level in August 2021. Employment increased by 33.5k, and the labor participation rate rose 0.2 percentage points to 66.6% after falling 0.4 percentage points in the prior month.
Real GDP in New Zealand rebounded 1.7% in the second quarter from a 0.2% contraction sustained in the first quarter of 2022. On-year growth of only 0.4% suffered from a pronounced base effect due to the post-Covid restraint upsurge in the second quarter of 2021.
Japan’s tertiary index of service sector activity fell 0.6% in July after a 0.4% monthly drop in June. The tertiary index’s year-on-year rate of increase was 1.6%, down from 2.3% in the second quarter.
The trade surplus of Indonesia, an energy producer, widened to a four-month high of $5.76 billion in August.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland trade balance, German WPI, Japan trade balance, Xi and Putin
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