Economic Data Flow Picking Up
October 29, 2024
The deluge of economic data that typically occurs around the cusp between tangential months has put currency market participants in a wait-and-see mode that is particularly focused on upcoming U.S. releases and how such might influence what the FOMC‘s U.S. interest rate vote next week.
Today’s U.S. data menu includes the JOLTS report on job openings, hires and quits and also includes house prices, consumer confidence, and an early bird look at the merchandise trade deficit. Data covering GDP, employment, wage growth, the jobless rate, personal income, personal consumption, the PCE measure of inflation, and the perceived conditions and expectations of U.S. manufacturers arrive later in the week. Corporate earnings are also attracting attention.
The countdown to the U.S. election is down to a single week. Markets will not be surprised if former President Trump wins the presidential contest, since he seems to have the momentum in key states and did better in the elections of 2016 and 2020 than opinion polls then had predicted. One sign today of rising expectations of a Trump win is the 1.9% overnight advance in Bitcoin’s price to its most elevated level in five months. Polls this time around point to a tight race between Trump and Harris. If Harris pulls out a narrow victory or if a clear winner isn’t apparent in the immediate aftermath, market anxiety could spike from fears of post-election violence. Congressional and gubernatorial contest results will then become especially important.
The dollar gains marginally overnight, edging up 0.1% against the yen and euro and now sporting handles of JPY 153 and $1.07, respectively. The dollar rose 0.3% against the Swiss franc and Australian dollar.
Equity markets around the world have been erratic, closing down 1.2% in Taiwan and 1.1% in China but up 0.8% in Japan and 0.5% in India. Movements in U.S. futures and European bourses have been slighter than these.
As the all important Fed interest rate decision nears, 10-year sovereign debt yields moved up four basis points overnight in France and Italy, three basis points in Spain and Germany and by two basis points in the United States and Great Britain.
Oil’s sharp drop Monday has been trimmed, and gold’s price is hovering close to its recent record high.
Central bank policy reviews today resulted in an unchanged interest rate of 9.0% in Kyrgyzstan and a 25-basis point cut to 7.25% at the Central Bank of Armenia. The National Bank of Kyrgyzstan’s rate had been cut initially by a full percentage point in November 2022 and four additional basis points combined this year in successive meetings in April and May. At 9.0% now, it remains at its lowest level since just before Russia invaded Ukraine and around midway between a low of 4.25% from July 2019 to May 2020 and the high of 14.0% from March 2022 to November 2022. On-year CPI inflation in Kyrgyzstan has decelerated from 16.2% in February 2023 to 4.6% currently, which is a tad below the 5-7% target.
The Central Bank of Armenia’s policy interest rate has been lowered at every scheduled review since June 2023, including 200 basis points since the start of 2024. Today’s reduction, like the previous five moves was by 25 basis points and brings the rate down to 7.25%, the lowest it’s been since December 2021. Armenian CPI inflation crested at a 307-month high of 10.0% in mid-2022 but was a mere 0.6% last month.
Japanese unemployment slipped to an 8-month low in September of 2.4% and the 1.24 ratio of job offers to seekers was just 0.01 above the 26-month low of 1.23 touched in June.
The German consumer confidence rose this month to a 31-month high but remained well-embedded in pessimistic territory at -18.3, wherein a reading of zero separates pessimism from optimism. Sentiment in the prior month had been measured at -21.1, and this year’s weakest reading of -29.0 was touched in February.
Austria’s manufacturing purchasing managers index fell 0.8 points to 42.0 in October, constituting a 10-month low and conveying significant recessionary conditions in the sector. Neutrality is represented by a score of 50.
Sweden experienced a recession this year. Real GDP dipped 0.1% both quarter-on-quarter and year-on-year this past summer. Such was the second straight quarter of negative growth after a 0.3% quarterly slide in 2Q and the third contraction in the past four quarters.
Belgian GDP last quarter grew just 0.2% versus 0.3% in the three prior periods. Year-on-year growth in 3Q was 1.0% and has been below 1.5% since the spring quarter of 2023.
A greater-than-projected 2.0% rebound last quarter in Irish GDP failed to return the year-on-year growth rate to positive territory, but at -1.2% such was a lot closer than the 9.1% plunge between the final quarter of 2022 and 4Q 2023.
Domestic producer prices in Singapore fell 1.9% on month in September, resulting in the largest 12-month decrease (-7.1%) since August 2023.
Retail sales in Spain, Sweden and Portugal last month respectively rose by 4.1%, 2.7% and 5.2% compared to a year earlier.
Just in: The size of U.S. merchandise trade deficit leaped 9.6% between August and September to a 30-month high of $103.3 billion. Two measures of U.S. house price inflation slowed in August to multi-month lows. The Case-Shiller index was 5.2% above its year-earlier level, lowest since October 2023. In the case of the FHFA index, house price inflation of 4.2% after 4.7% in July was its lowest pace since July 2023.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Armenia, German consumer confidence, Japanese unemployment, National Bank of Kyrgyzstan, U.S. trade deficit and house price inflation
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