A Lack of Direction at Start of New Week
April 24, 2023
In financial market action around the world, the dollar is unchanged from its pre-weekend closing levels against the loonie, sterling, kiwi and Chinese yuan. There’s been a rise of 0.4% against the yen but a drop of 0.2% versus the euro and Swiss franc. U.S. equity futures have edged marginally lower in spite of a 4-basis point drop in the 10-year Treasury yield. 10-year British gilt and German bund yields are up a basis point. Bitcoin and oil prices are down 0.4% and 0.2%, while gold is 0.3% firmer. In Asia, stock markets closed down by 0.8% in China and South Korea, 0.6% lower in Hong Kong. and 0.1% in Japan. In Europe, there’s been hardly any change in the German, British or French stock markets, but those in Spain and Italy have lost almost 1.0%.
Today’s most consequential data release has been the April IFO-compiled German business climate survey, which reveals slightly improved sentiment due to lessening fears of an energy crisis but an economy still lacking dynamism. Business climate rose 0.4 index points to a 14-month high of 93.6 on a more hopeful outlook but current conditions slid back to a 2-month low. The overall index’s recent trough of 85.0 last October was a 29-month low, and while manufacturing rose to a 14-month high, the subindices for services and trade dipped to 2- and 3-month lows this month.
Producer price inflation is receding significantly. Polish producer prices posted a second straight monthly decline in March (-0.8%), dampening its 12-month rate of increase to a 19-month low in March of 10.1% from 18.2% in the prior month and a 323-month peak last June. Finnish producer prices also fell on month in both February and March, resulting in a 25-month low year-on-year increase of 3.8% in March, down from 9.2% in February and a record 32.5% last June.
Inflation is ebbing only slowly, by contrast, at the consumer price level. Singaporean CPI inflation of 5.5% in March was its lowest since April 2022 but just two percentage points south of the 170-month peak of 7.5% last August and September. Excluding food and energy, the core CPI in Singapore of 5.0% was only 0.2% lower than its average last August and September. In Iceland, consumer prices over the last four reported months posted month-on-month advances of 0.7% in December, 0.9% in January, 1.4% in February and 0.6% in March, and year-on-year CPI inflation backed off just 0.4 percentage points to a 3-month low of 9.8% last month from February’s 10-month high of 10.2%.
Czech consumer and business confidence improved in April to 18- and 9-month highs but remained below the 100 threshold.
Following a 30-month low in December of 97.8 and despite a catastrophic earthquake on February 6, Turkish manufacturing sector confidence has improved to an 11-month high of 108 this month.
Taiwanese retail sales were 7.1% more plentiful in March than a year earlier, but industrial production over the same span dropped 14.5%. Polish retail sales and industrial production dropped 2.9% and 7.3% between March 2022 and last month.
The year-on-year rise of the British Rightmove house price index fell nearly in half to 1.7% in April from 3.0% in March and 9.9% in April 2022.
The Chicago Fed national activity index failed to recover partly in March as analysts had predicted but instead matched February’s reading of -0.19. The CFNAI had previously oscillated from -0.44 in December to +0.23 in January and then -0.19 in February.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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