Difficult Session for Chinese Stock Market and Currency – Currency Thoughts
Difficult Session for Chinese Stock Market and Currency
January 3, 2025
The dollar in offshore trading advanced to somewhat above 7.35 yuan, depressing China’s currency to an 18-year low, and the Shanghai Composite equity index tumbled 1.6% after officials let China’s 10-year interest rate slide below previous support levels.
Against other currencies, the dollar is lower than Thursday closing levels by 0.4% against the euro and Swiss franc, 0.3% versus the loonie, sterling and Australian dollar and 0.2% vis-a-vis the New Zealand dollar. Nonetheless, the weighted DXY dollar index remains higher than its 2024 closing level and 9.0% stronger than July 2023 low. At the recent 2025 peak elevation of 109.44, DXY was its highest since October 9, 2022.
Elsewhere in Asia today, share prices rose 1.8% in South Korea and 0.7% in Hong Kong but fell 0.9% in India. Japan stayed shut. Key Euroland stock market losses so far today range from 0.4% in Germany and Italy to 0.8% in France. U.S. stock futures are 0.2-0.3% higher, but similar pre-open gains yesterday gave way to losses during the trading hours.
The 10-year U.S. Treasury yields is two basis points lower. In contrast, similar yields in the euro area show overnight increases of 3 basis points in France and a basis point each in Germany and Italy.
Prices for bitcoin and WTI oil are 0.2% lower; gold is steady.
Turkish consumer and producer price inflation decelerated further in December. The 12-month rise in the CPI dropped almost three percentage points to an 18-month low of 44.38%. This compares to a peak last May of 75.5%, a prior low of 38.2% in June 2023, and an even higher October 2022 crest of 85.5%. Producer price inflation of 28.5% last month was down from 57.7% last May and 157.7% in October 2022.
A 2-month high in Polish CPI inflation of 4.8% in December slightly undershot analyst expectations but exceeded last March’s 5-year low of 2.0%.
Georgian CPI inflation jumped 0.6 percentage points to a 6-month high of 1.9% in December. Such previously imploded from 13.9% in January 2022 to 0.3% this past October.
Germany’s unemployment rate printed at 6.1% for a third straight month. That was a tad better than analysts had been predicting.
British mortgage approvals slipped unexpectedly in November but still exceeded the November 2023 level by about a third.
Czech GDP growth in the third quarter of 2024 was revised up a tenth of a percentage point to 0.5% quarter-on-quarter and 1.4% on a year-on-year basis.
Romania’s manufacturing purchasing managers index fell to a 17-month low of 46.4 last month versus 48.0 in November.
The Swiss manufacturing PMI edged down 0.1 point to a 5-month low of 48.4. Readings under 50 connote a weakening trend.
The U.S. Institute of Supply Management’s December manufacturing and non-manufacturing purchasing manager surveys will be released at 10:00 EST today. Investors are keenly awaiting the House of Representatives’ vote on whether to retain Mike Johnson as Speaker, which is expected around noon today. Two events next week — FOMC minutes on Wednesday and the Labor Dept’s December employment situation release on Friday — will attract keen interest, too. Thursday, January 9th, has been declared a national day of mourning for former President Jimmy Carter, and the U.S. stock market will not trade that day.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese yuan slides, House vote on Speaker Mike Johnson, Turkish CPI and PPI
ShareThisYou can leave a response, or trackback from your own site.
