Not a good day for the dollar yesterday, as it lost 80 cents on extremely weak economic data. October’s trade deficit increased by a billion and a ¼, consumption fell by a 1/10th%, new home sales contracted by 9% and the Richmond manufacturing index is down a point. Mortgage applications rose by 5 ½% providing at least one glimmer of hope, but then Fed head Jerome Powell drove the spike further in at his speech last night, casting a shadow over a December interest rate hike. The result – a steep dip in the dollar that, however, though, indexes are up nicely – the Nasdaq nearly 3% and the Dow, 2.5.
The pound rose in the Asian session after Yesterday’s Bank of England press conference had a unified message for brits: Brexit is bad for the economy, but – said governor carney – the agreement thatched together by Theresa May provides the best possible conditions for a very bad event. Most European indexes last night closed marginally up, the DAX and FTSE down point 9 and point 18 of a percent. This is after Germany posed some pessimistic consumer confidence in the morning followed by the 10year bond auction which concurred with a drop from 42% yields to 34. And all of this over a spat between the US and. …
… China, where indexes closed in the red this morning. Asian stocks had been following the US as the day began, but the mood turned sour as the day drew to a close, erasing all the day’s gains. In Japan Retail trade increased by a welcome 3.5%, and the Nikkei gained about a 1/3% overnight; while New Zealand’s business activity outlook for November is up 2 clicks to 7.6%
Gold last night rose perfectly in tandem with the dollar drop at noon New York time, then opened in Asia with a $6 bull gap. The metal is right now well above its mid-term moving averages and our oh-so-gradual 3-month up trend is still in place. Oil, despite the EIA’s 3.6 mn barrel increase, reversed losses in the Asian session, but continues bouncing around the 50 and a ½ level.
At 8 this morning we’ll be having ECB president Draghi addressing the global finance forum in Frankfurt and at 7 tonight, we’ll have the minutes of the US’s fed meeting last month. In between, unemployment in Germany at 5 to 9 followed by mortgages and credit from the UK at 9:30. The Eu’s confidence measures will be in at 10, and spending, income and jobless claims in the US at 3. Unemployment, CPIs and industry in Japan is in at 10 to midnight and China’s PMIs at 1 tomorrow morning.