More Central Bank Rate Cuts, Mixed Global Economic Data and a Weaker Dollar
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More Central Bank Rate Cuts, Mixed Global Economic Data and a Weaker Dollar
The dollar traded down overnight by 1.2% against the peso, 1.0% relative to the kiwi, 0.9% vis-a-vis the Australian dollar, 0.6% versus the Swiss franc, 0.4% against the euro, 0.3% relative to the loonie and 0.1% against sterling. Against the yen, the dollar inched 0.1% higher, but the U.S. currency in trade-weighted terms is close to three-week low.
Share prices in the Pacific Rim and Europe are mixed, with market declines of 0.8% in Singapore, 0.5% in China and 0.3% in France but gains of 2.1% in India, 0.8% in Japan, 0.5% in South Korea and 0.4% in Germany and Great Britain. U.S. stock futures are higher, too.
The ten-year British gilt yield slipped two basis points partly on news of a 44-month low in British CPI inflation.
The price of WTI oil increased over 2%, and that of gold is 0.5% higher.
The People’s Bank of China left its 1-year Loan Prime Rate at 3.85% and the 5-year LPR at 4.65%. The one year rate had been cut 10 basis points in February and another 20 bps in April.
A big upside data surprise today involves Japanese core domestic machinery orders in March, which instead of dropping 7%, only edged 0.4% lower after solid back-to-back increases in January and February.
British CPI inflation decelerated nearly in half to 0.8% last month. Core CPI inflation dropped 0.2 percentage points to 1.4%. With a drop of 0.7%, producer output prices were below their year earlier level for the first time since mid-2016, and producer input prices plunged 5.1% on month and 9.8% on year.
Belgian consumer sentiment bounced off April’s 26-year low of -26 to print at -23 in May.
Likewise, Danish consumer confidence rebounded 3.1 points to -11.9 in May but remained will below its January level of 4.5.
Dutch consumer confidence deteriorated further in April to a 79-month low of -31. Two months earlier such was -2 in February. Dutch unemployment in April increase a half percentage point to a 5-month high of 3.4%, but Dutch household consumer spending in March was 6.7% lower than a year earlier versus a 0.9% on-year increase the month before.
A 2.0% on-year rise in South African retail sales in February was almost twice what analysts were expecting.
Malaysian consumer prices dived by a record 2.7% in April to set a record greatest on-year decline of 2.9%.
CPI inflation in the euro area last month was revised 0.1 percentage point lower to 0.3%, a 44-month low. Core CPI of 0.9% was at an 8-month low, and the energy CPI component was 9.7% below its year-earlier level.
Canadian CPI inflation dropped 1.1 percentage points in April to record its first negative reading (-0.2%) in 127 months.
Euroland’s seasonally adjusted current account surplus in March was 31.8% narrower than February’s spiked high. The EUR 40.66 billion surplus compares to EUR 38.1 billion a year earlier, and the EUR 338 billion current account surplus over the past 12 reported months was equivalent to 2.8% of GDP.
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