Dollar and Stocks Up and Commodities Down Ahead of U.S. Jobs Report

Dollar and Stocks Up and Commodities Down Ahead of U.S. Jobs Report

January 5, 2018

The dollar has advanced overnight by 0.5% against the yen, 0.4% vis-a-vis the peso, 0.3% versus the Aussie dollar, 0.2% relative to the euro and Swiss franc, and 0.1% against the loonie. There’s been a dip of 0.1% versus the yuan.

The Nikkei-225 in Japan recovered another 0.9%, and the South Korean Kospi is 1.3% stronger. Stocks in China and Hong Kong rose 0.7% and 0.3%. In Europe, share prices are up 1.1% in Germany, 0.7% in Italy and France, 0.5% in Spain and 0.3% in Britain.

The 10-year futures Treasury yield edged a basis point higher, but equivalent British, German and Japanese sovereign debt yields are flat.

One of the biggest moves has been a 1.0% drop in West Texas Intermediate crude oil to $61.42 per barrel, and Comex gold has softened 0.2%.

U.S. and Canadian labor market and trade figures get released shortly.

German retail sales volume catapulted 2.3% higher in November, the biggest advance so far in 2017. This produced a 4.4% on-year increase and suggests that sales volume for 2017 as a whole will have risen about 2.9% after a 2.6% gain in 2016.

The German construction purchasing managers index rose to a 4-month high of 53.7 in December, implying good dynamic expansion.

Retail activity in the euro zone improved sharply last month. The retail purchasing managers index advanced 0.6 points to a 6-month high of 53.0 in December, with the indices of Germany and France at 8- and 3-month highs but Italy’s 49.5 reading after 49.2 in November showing continuing contractions. A score of 49.9 or less means contraction.

Consumer price inflation in Euroland edged down 0.1 percentage point (ppt) according to the preliminary estimate to 1.4%, which is only 0.3 ppts above the level at end-2016. Core inflation was 0.9% for a third straight month and tied with its end-2016 level as well.

Euroland producer prices jumped 0.6% overall in November and accelerated to a 2.8% 12-month rate of increase. This was caused by a 2.3% rise in energy. Non-energy producer prices were unchanged month-on-month and posted a smaller 2.1% on-year advance.

British unit labor cost inflation slowed to 1.3% in the third quarter of 2017 from 1.7% in the prior quarter. U.K. shop prices recorded a 0.6% year-on-year drop in December, more than any other month since May.

On-year growth in Japan’s monetary base slowed to 12.9% last quarter from 15.8% in 3Q17, 17.0% in full-2017, 25.0% in 2016 and 34.0% in 2015.

Australia’s goods and services trade balance was in deficit by A$ 628 million in November, twice as much as the A$ 302 million shortfall in October. September saw a surplus of A$ 1.169 billion.

Japan’s composite PMI in December matched November’s 2-month low of 52.2. The services PMI edged down 0.1 point to a 3-month low of 51.1 — second lowest of 2017 — even though business confidence improved and output price inflation hit a 16-month high.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Euroland CPI and PPI


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