Canadian Liberals Hold onto Power and Another Drop in U.S. Consumer Confidence – Currency Thoughts
Mid-Tuesday Report: Canadian Liberals Hold onto Power and Another Drop in U.S. Consumer Confidence
April 29, 2025
U.S. stocks and the dollar were holding on to slight gains at the midday hour EDT. Ten-year sovereign debt yields had fallen by three basis points in the United States, Great Britain and Germany and by two bps in France, Italy and Spain. In contrast to gains yesterday, the prices of oil, gold and Bitcoin at this hour show losses of 1.7%, 0.8% and 0.2%. Among other stock markets around the world, share prices closed up 1.0% in Taiwan, 0.9% in Australia, 0.7% in South Korea and 0.4% in Japan, while those in Europe’s three largest markets are up 0.6-1.1%, currently.
Central bank interest rates were held steady in Hungary and Kyrgyzstan following scheduled monetary policy reviews. The National Bank of Hungary‘s key rate has been at 6.50% since a 25-bp reduction last September that left the rate at half the 13% peak level maintained for 13 months until an initial cut in October 2023. Consumer price inflation in Hungary of 4.7% in March is above the 3.0% low last September and associated with a 5.7% core inflation rate, a 7.3% producer price inflation rate. The National Bank of Kyrgyzstan’s policy interest rate was left unchanged at 9.0%, the level since a two percentage point cut in May 2024. The rate had been at 14.0% from March 2020 until November 2022. CPI inflation in Kyrgyzstan of 6.9% lies within the 5-7% target range but just barely.
Canada’s parliamentary election yesterday left the Liberal Party, now led by Prime Minister Mark Carney, in control but likely with a couple of seats shy of a majority. Calling President Trump’s treatment of its northern neighbor a “betrayal,” Carney declared the two countries’ historically close alliance to be “over.”
Among U.S. data reported today, the Conference Board’s monthly consumer confidence index fell more than forecast in April to a 39-month low of 86.0 from readings of 93.9 in March and 112.8 in November when Trump was elected. The FHFA house price inflation rate fell 1.1 percentage points to a 20-month low of 3.9%, whereas the Case-Shiller index of house prices in 20 metropolitan areas printed at a 2-month low of 4.5%. According to the JOLTS labor market figures, job openings fell, while quits and layoffs each rose. In contrast to the intent of Trump’s tariff threats, which is to reduce America’s trade deficit, the result has been just the opposite so far. The preliminary estimate of the U.S. goods trade deficit in March shot up to a record $162 billion from $148 billion in February, $156 billion in January and $101 billion on average in the last year of the Biden presidential term.
Consumer confidence was reported in several other countries as well. Such rose in Germany to a 6-month high but remained depressed historically with a reading of -20.4. Italian consumer sentiment dropped 2.3 index points to an 18-month low and was paired with a 53-month low in manufacturing business confidence and drops of 0.4% on month and 1.5% on year in industrial sales. Consumer confidence in Portugal dropped 1.9 index points to an 11-month low. Euroland’s final consumer confidence measure for April was left unrevised from the 17-month low figure reported initially. And Swedish consumer confidence sank to a 10-month low of 81.6 this month from readings of 88.8 in March and 101.2 last November.
Other Swedish data out today showed depressed GDP last quarter (unchanged from the final quarter of 2024 and just 1.1% above the level a year earlier). Swedish business confidence hovered near its historical average this month, however.
Euroland’s economic sentiment index dropped 1.5 points to a 9-month low in April. Industry and services printed at 3- and 48-month lows, while price expectations among manufacturers ticked upward. A separate data release from the joint currency area showed slower money growth and continuing sluggish credit demand.
Spanish GDP last quarter grew 0.6% versus 4Q 2024 and 2.8% year-on-year. Both changes underperformed expectations.
Producer price inflation in Singapore slowed in March to a 3-month low of 3.9%. Earlier this decade, such had dived from 31.5% in May 2022 to a low of -15.2% in mid-2023.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without expressed permission.
Tags: National Bank of Hungary, National Bank of Kyrgyzstan, Spanish and Swedish GDP, U.S. consumer confidence and house prices
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