Still Pausing
February 27, 2024
The dollar slipped back overnight by an additional 0.3% against the yen, 0.2% versus the Canadian and Australian dollars and 0.1% relative to the euro, Swiss franc and sterling.
Ten-year sovereign debt yields fell three basis points in the U.K. and a single basis point each in Germany and the United States. Alternatively, the Spanish and Italian yields are steady and the Japanese 10-year JGB is a basis point firmer.
Stock markets have changed very little today in Japan, Australia, New Zealand, France, Italy or Great Britain. U.S. stock futures are likewise steady. The Shanghai Composite and Hang Seng indices closed up 1.3% and 0.9%, while the South Korean Kospi dropped 0.7%.
The biggest action of the day has been a roughly 4% rise in the price of Bitcoin. Gold is up 0.5%, while oil has lost 0.3%.
Not much data has been reported overnight, but investors are awaiting U.S. housing prices and durable goods orders. Hamas has given a virtual thumbs down to the latest cease-fire offer. The U.S. political trail will be focused today on the Michigan Democratic and Republican presidential primaries. Global data floodgates will be wide up on Wednesday-Friday.
Japanese consumer price inflation decelerated in January to overall and core 22-month lows of 2.2% and 2.0%. When excluding energy as well as perishable food (AKA core core inflation), consumer price inflation dropped from 3.7% in December to an 11-month low of 3.5%. The timing of the Bank of Japan’s first interest rate hike seemingly will be influenced strongly by whether annual wage hikes this spring are ample.
Heading into March, consumer confidence in Germany recovered only marginally from the prior month’s 11-month low. Sentiment about future prospects remains quite bearish.
French consumer confidence in February worsened two index points in February and, at 89, was well below the long-term average score of 100.
Finnish consumer sentiment slid back to a 2-month low in February from January’s 28-month high.
Austria’s manufacturing purchasing managers index was unchanged in February from January’s 10-month high, but at 43 still depicts a fairly strong pace of contraction.
The on-year increase of British shop prices slowed to a 22-month low in January of 2.5% from 2.9% in December and 9.0% last April.
Broad M3 money growth in the euro area remains very weak, posting a year-on-year dip of 0.3% in the three months through January. Loans to households and non-financial companies were respectively only 0.3% and 0.2% above year-earlier levels in January, and credit to private residents posted a year-on-year drop of 0.4%.
The National Bank of Kyrgyzstan’s reference interest rate was kept at a highly restrictive 13.0% after the latest scheduled monetary policy review. The one and only cut so far was done in November 2022 from the cyclical peak of 14.0% reached in March 2022. The interest rate had been as low as 4.25% at the end of 2019, then hiked to 5.0% in February 2020 and held at that level for a whole year. 300 basis points of tightening later in 2021 was followed by another 600 basis points in the first quarter of 2022. Meantime, consumer price inflation in Kyrgyzstan has receded from 16.2% in February 2023 to just 5.0% now.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland money and credit growth, Japan CPI, National Bank of Kyrgyzstan
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