Potentially Momentous Week Starts Quietly
November 13, 2023
The dollar edged 0.2% higher overnight against the Japanese yen, Canadian dollar, Swiss franc, and both the Aussie and New Zealand currencies. The dollar firmed 0.1% against the euro but slid 0.1% relative to sterling.
Share prices in the Pacific Rim closed mixed, with gains of 1.3% in Hong Kong and 0.9% in Taiwan but losses of 0.4% in Australian and New Zealand, 0.5% in India and 0.2% in South Korea. European equities are currently showing intra-day gains ranging from 0.2% in Germany to 0.9% in Italy, but U.S. stock futures are down a touch.
Ten-year sovereign debt yields have slid two basis points in the U.S., Germany, and U.K. but ticked two basis points higher in Japan. Prices of oil and gold have risen 0.2%, while that of bitcoin has fallen 0.7%.
Optimism toward the United States that had permeated financial markets lately got a disturbed awakening Friday when Moody’s shifted the outlook designation on U.S. government debt from stable to negative. There is a risk of a government shutdown as soon as Friday when the temporary debt ceiling lift arranged last June expires.
Other key developments this week include the releases of U.S. CPI, PPI and import price data on Tuesday, Wednesday and Thursday, Euroland and Japanese 3Q GDP on Tuesday and Wednesday, Chinese industrial production and retail sales on Wednesday, U.S. retail sales on Wednesday and U.S. industrial production on Thursday. One senses that the war in Gaza can’t go on much longer as it has been, and President Xi of China and President Biden of the U.S. will be holding key face-to-face discussions Wednesday at the APEC Conference.
A limited Monday data menu included
- Japanese domestic producer good prices, which fell 0.4% on month in October and posted its lowest year-on-year rise (0.8%) in 31 months. Import price inflation, meanwhile, has swung to -11.7% from +48.7% in September 2022.
- Egyptian consumer price inflation, which slowed from a record 38.0% in September to a 4-month low of 35.8% last month.
- Indian CPI inflation, which eased by 0.15 percentage point to a 4-month low of 4.87% in October.
- Portuguese consumer price inflation in October, which remained unrevised from the preliminary two-year low of 2.1% versus a three-decade high a year earlier of 10.1%.
- Chinese M2 money growth, which in October matched September’s 10.3%, an 18-month low. New yuan bank loans fell sharply from CNY 2.31 trillion in September to CNY 738 billion in October.
- Japanese machine tool orders, which in October slumped 20.6% year-on-year, the biggest such drop since -22.2% recorded over the 12 months to June.
- Germany’s current account surplus, which at EUR 28.1 billion in September exceeded expectations by a significant margin after printing at EUR 22.8 billion in August and averaging EUR 21.3 billion over the first eight months of this year.
- Ireland’s construction purchasing managers index, which remained below the 50 neutral level for a fourth straight time and dipped to a 2-month low of 47.3 in October.
- Turkey’s current account, which swung into surplus ($1.876 billion) in September for just the second time since October 2021. Turkey also released retail sales figures that showed the slowest year-on-year advance (13.8%) in 10 months. That was down from a 21-month high of 34.0% last January.
The U.S. IBD/TIPP optimism index rebounded sharply in November to 44.5 from readings of 36.3 in October and 43.2 in September.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
ShareThis
