Slow Start to the Week Before Christmas
December 18, 2023
The weighted DXY dollar index held steady on balance overnight, climbing 0.4% against the yen and peso but dropping 0.2% relative to the euro and 0.4% versus the Swissie and Aussie dollar.
Share prices closed down 1.0% in Hong Kong, 0.6% in Japan and 0.4% in China. The German Dax and Paris Cac are 0.3% lower, but U.S. stock futures have risen 0.2%. Ten-year U.S. Treasury and German bund yields are flat. Bitcoin’s price fell back 1.1%, whereas oil prices recouped 1.1%.
The Bank of Japan will unveil results of its last Board meeting of 2023 on Tuesday, and analysts do not anticipate a change in policy. Officials want more proof that wage growth will be sufficient before exiting their ultra-loose stance. Another theme out of Asia has been gloom regarding China’s economic performance and disappointment that the government hasn’t done more to support faster growth.
There was some good economic news from New Zealand. The manufacturing and service sector purchasing manager indices there rose to 5- and 6-month highs in November, and consumer confidence in 4Q 2023 improved to a 7-quarter high.
Germany’s IFO business climate index unexpectedly dropped to a 3-month low in December of 86.4. That’s not far better than the October 2022 29-month low of 84.3. By sector, construction slid further to a 219-month low, and manufacturing dropped to a 42-month trough, offsetting 2-month highs in trade and services. All in all, officials pronounced the state of Germany’s economy at end-2023 as still weak (perceived current conditions are at a 40-month low) and likely to stay so early in 2024 given the 3-month low in the expectations index.
Czech producer prices fell by a larger than forecast 0.4% on month in November, resulting in a 2-month on-year high of just 0.8% after that of 0.2% in October. PPI inflation crested in April 2022 at 26.6%.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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