Thanksgiving Day Roundup – Currency Thoughts
Thanksgiving Day Roundup
November 28, 2024
While Americans observed their Thursday Thanksgiving holiday, the dollar strengthened 0.1-0.3% against the euro, yen, Swiss franc, sterling and Australian and New Zealand dollars but also retreated 1% against the Mexican peso. Stock markets in the Pacific Rim dropped 1.5% in India and New Zealand, 1.2% in Hong Kong, 0.6% in Indonesia and 0.4% in China but closed up 0.6% in Japan. The German DAX and Paris CAC are each up more than half a percent. Ten-year sovereign debt yields have slipped five basis points in France and Italy, two bps in Germany and 0.1% in Japan and Great Britain. Bitcoin has settled back 0.7% but is still above $95k and worth more than $23,000 greater than its value on Halloween. There’s been scant change overnight in the value of gold or oil.
The Bank of Korea’s base rate was cut 25 basis points for the second time in two months, a move that watchers of South Korean monetary policy were not anticipating. At 3.0% the rate is its lowest in two years but still comfortably above the latest CPI inflation measurement, which was at a 45-month low of 1.3% and near the central bank 1-3% target floor. In addition to ongoing disinflation from a cyclical peak of 6.3% in July 2022, a released statement from monetary officials justified today’s action by citing “an ongoing slowdown in household debt and downward pressure on economic growth that has intensified.”
Today’s main data release was the November survey of economic sentiment in the euro area, which ticked 0.1 point above October’s six-month low to a still-depressed 98.8 reading. Consumer sentiment dropped to a 5-month low, and sentiment in the service and construction sectors punched in at 4-month lows, as did the labor market indicator. Sentiment in the industrial sector rebounded marginally from a 27-month low, and projected inflation over the coming year climbed to a 20-month high.
Other data release highlights today included
- German and Spanish November consumer price inflation of 2.2% and 2.4%, respectively. These were above October readings mainly due to base effects in the energy component. German service sector inflation remained stubbornly unchanged at 4.0%.
- Producer price inflation in South Africa and Brazil. Such slipped under zero percent in South Africa for the first time, having peaked at 18% around mid-2020. Brazilian PPI inflation of 5.9% was down from 36.8% in mid-2021.
- Italian PPI inflation (-4.8% as of October) has been negative since April 2023.
- Icelandic consumer price inflation of 4.8% this month is its lowest in three years.
- Polish GDP recorded a quarterly decline for the first time in a year during the summer but was 2.7% higher than in the third quarter of 2023.
- Consumer confidence in Italy slipped to a 3-month low in November, while manufacturers were their most pessimistic since September.
- By contrast in Sweden, consumer and business confidence improved to a 35-month and 27-month high.
- Portuguese consumer confidence in November weakened to a 3-month low, whereas business confidence strengthened to a 67-month high.
- Canada’s current account recorded its ninth straight quarterly deficit in 3Q. Such totaled C$ 3.2 billion compared to a shortfall of C$ 8.0 billion in the same quarter a year earlier.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Korea, Euroland economic sentiment
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