Awaiting Several More U.S. Data Releases Scheduled Today

November 16, 2023

In addition to the usual Thursday weekly report on jobless insurance claims, the U.S. data menu features import prices and industrial production and also includes the Philly Fed and K.C. Fed manufacturing surveys, the NAHB monthly housing market index, capacity utilization, and Treasury-compiled capital flows between the U.S. and other countries. So far, financial markets have handled this week’s data deluge well, although a contingent of analysts are raising doubts that Fed officials are ready yet to concede that the fed funds target needn’t go higher.

In overnight market action, the dollar was narrowly mixed, rising 0.4% versus the Swiss franc, 0.2% against the loonie and 0.1% relative to the British pound but dropping 0.1% against the yen and euro and 0.3% and o.5% versus the Aussie and New Zealand dollars.

Ten-year sovereign debt yields have dropped 7 basis points in the U.K., four bps in the U.S., Germany and France and a basis point in Japan.

The U.S. stock market rally has paused, at least temporarily pending today’s data revelations. Yesterday’s meeting between the presidents of the U.S. and China produced no substantive headlines to suggest a thaw in their governments’ tense relations.

In other stock markets, share prices fell back 1.4% in Hong Kong, 1.1% in New Zealand, 0.7% in Australia and China and 0.3% in Japan. Major European exchanges so far show advances in Germany, Spain and Italy but declines in the British Ftse and Paris Cac. None of those moves has been especially significant.

Bitcoin’s price, which has staged a large revival of late, fell 1.5%. Oil and gold are generally steady.

Officials at the Central Bank of the Philippines, who had unexpectedly raised their interest rate at October’s policy review, left their key interest rate unchanged at 6.50%. That’s a full percentage point above its end-2022 level. After slashing the rate in half during 2020, the rate had been at 2.0% from November that year until an initial hike in May 2022. Increases last year totaled 350 basis points. The October rate hike had been accompanied by the admission that policy would need to be tighter for longer and an upward revision of the risk-adjusted inflation forecast. Today’s statement nudges the forecast back lower to 4.4% next year and 3.4% in 2025 but retains the view that the balance of inflation risks “still lean significantly toward the upside.” The effect of earlier tightening taken has yet to be felt fully oil prices and wages present concerns. “he BSP remains prepared to resume monetary policy tightening as necessary to steer inflation towards a target-consistent path, in line with its price stability mandate,” which is a range of 2-4%. CPI inflation of slid to a 3-month low of 4.9% last month, and core inflation stood at a 13-month low of 5.3%.

Japanese data releases today revealed

  • A JPY 663 billion customs trade deficit in October, down from JPY 2.206 trillion a year earlier.
  • A 1.0% monthly drop of the tertiary index of service-sector activity during September. That was the weakest month since March. A 2.1% on-year increase was down from 2.5% in July-August.
  • Core private domestic machinery orders, a leading indicator of future business investment, rose by a greater-than-assumed 1.4% in September but still fell 1.8% on average in the third quarter.

Australian unemployment ticked up a tenth of a percentage point to 3.7%, but employment grew strongly (55k). Labor market participation also increased.

Croatian consumer price inflation slowed by 0.9 percentage points to a 21-month low of 5.8% in October versus the record high 13.5% in November 2022.

Czech producer price inflation of just 0.2% last month was its lowest in 33 months. Sri Lankan PPI deflation printed at -6.9% in September, matching August’s reading and representing the fourth sub-zero percent result in a row.

Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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