Day Before Christmas and Not Much to Report – Currency Thoughts
Day Before Christmas and Not Much to Report
December 24, 2024
Compared to Monday closing levels, the dollar is unchanged against the euro, yen, and sterling. The greenback is up 0.3% relative to the Australian dollar and by 0.2% versus the Canadian dollar and Swiss franc but shows a 0.4% loss relative to the Mexican peso.
Many stock and bond markets particularly in Europe were either shut or closed early. The U.S. is open for business; banks will observe normal hours but the stock exchange will close at 13:00 EST. The 10-year U.S. Treasury yield ticked a basis point higher overnight and, at 4.59%, is 70 basis points above the yield just before Christmas 2023 in spite of a full percentage point cut in the federal funds rate from peak. U.S. stock futures have barely moved.
10-year British gilt and Japanese JGB yields are 5 and 1 basis points higher.
Notable share price moves today include gains of 2.6% in Lebanon, 1.3% in China, 1.1% in Hong Kong, 0.6% in the Netherlands and France and 0.5% in the British FTSE.
WTI oil is 1.0% higher, but Bitcoin‘s price is down 0.6%.
Lebanese consumer price inflation continued to recede in November, slowing to a 57-month low of 15.4% in November from the April 2023 peak of 268.8%. The drop in the year-on-year rate of increase masked a 2.3% monthly advance, however.
A global theme of 2024 was a decline of inflationary pressure, but the year has ended with central bankers reluctant to declare victory in restoring price stability. Published minutes today from the Reserve Bank of Australia expressed rising confidence that inflation will eventually fall to the 2-3% target range but also defended the continuing need for restrictive monetary policy due to high residual uncertainties regarding the outlook including the possibility of a tariff war.
A flurry of high month-on-month rises in producer prices last month reported in recent days underscores the guarded mood of many central banks. In addition to the aforementioned 2.3% monthly PPI increase in Lebanon, Malaysian officials today announced that their PPI rose 1.4% between October and November. Other monthly increases that month totaled 3.2% in France, 2.8% in Iceland, 3.1% in Sweden, 1.1% in Portugal, 1.3% in Belgium, 1.2% in Italy, 1.9% in Ireland, 0.6% in Canada and 0.4% in the United States. German import price inflation in November was just 0.4%, but the increase between October and November was outsized at 0.9%.
A 0.8% rise in Dutch GDP last quarter has been reconfirmed and resulted in a six-quarter 1.7% high in year-on-year growth. The Dutch current account surplus of EUR 80.4 billion over the first three quarters of 2024 was 11.6% wider than a year earlier.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Lebanese and Dutch PPI, Reserve Bank of Australia board minutes
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