Where’s the Bottom? – Currency Thoughts
Where’s the Bottom?
March 11, 2025
Stock market action today has featured some tepid bottom-fishing after Monday’s debacle. In pre-open futures, the DOW, SPX and Nasdaq each bounced 0.3% higher. In Europe, the British Ftse and German Dax are up 0.2% so far, but French and Italian equities are just flat. Japan’s Nikkei closed 0.6%, while markets in Singapore, Taiwan and South Korea slumped by 1.9%, 1.7% and 1.3%.
The dollar touched multi-month intra-day lows of 1.0920 per euro and JPY 146.54 and currently show a net overnight loss of 0.5% against the common European currency but a 0.2% net rise versus the yen. The dollar is also 0.1% higher against the Swissy but 0.3% lower versus sterling.
Bitcoin experienced another wild session, slumping at one point to a post-U.S. election price low of $76,883 but now sporting a net 3.8% overnight advance to a tad above $81,700. The prices of WTI oil and gold are 1.1% and 0.6% higher.
The 10-year Japanese JGB yield fell back six basis points in response to downwardly revised Japanese fourth-quarter GDP growth. Other ten-year sovereign debt yields are up three basis points in Germany, two bps in Italy and Spain, and a basis point in the United States and France.
More complete data show Japan with a GDP rise between the third and fourth quarters of 2.2% expressed at an annualized rate. That’s revised down from 2.8% reported last month. In year-on-year terms, real GDP rose 1.1% in the fourth quarter but posted an average uptick for 2024 as a whole of only 0.1%, following advances of 1.5% in 2023 and 2022. Growth in the final quarter of 2023 was led by net foreign demand and non-residential investment but diminished by 1.3 percentage points by a negative contribution from inventories. The GDP price deflator increased 2.9% year-on-year in the quarter, matching the 2024 average pace.
Other Japanese data out today showed a considerably worse-than-forecast 4.6% monthly drop in household spending that trimmed the year-on-year rise in such from 2.7% in December to just 0.8% in January. Also, Japanese machine tool orders posted a 3.5% 12-month rise in February, which was the least in four months and down from an increase of 11.2% in January.
At the coming meeting on March 18-19, the Bank of Japan Board is not expected to raise its 0.50% interest rate target. Officials want to see how the spring annual wage negotiations wind up and then judge when and by how much to normalized the interest rate.
The February National Australia Bank monthly survey of business conditions and confidence produced a six-point slide in confidence to a 2-month low of -1 and a 1-point uptick of conditions to +4. Westpac-Melbourne’s index of Australian consumer sentiment improved 3.7 points to a three-year high of 95.9 this month.
Motor vehicle sales in China accelerated to a four-month high of 34.4% in February, helped by the distortion of the Lunar New Year holiday. Xi and Trump have tentatively scheduled person-to-person talks in June.
Another sign of uneasiness in the U.S. business community came from today’s release of small business sentiment, which is compiled by the NFIB. Such dropped to a reading of 100.7 in February after 102.8 in February and a 7-month high of 105.1 in December.
Indonesian consumer confidence fell to a 3-month low of 126.4 in February. December’s 8-month high of 127.3 was well above last October’s 22-month low of 121.1.
Today’s batch of released price data around the world included
- An acceleration of Dutch consumer price inflation by half a percentage point to a 2-month high of 3.8%. The pace previously slowed from a peak of 14.5% in September 2022 to -0.4% in October of 2023.
- The estimate of Czech CPI inflation in February was reconfirmed at the preliminary figures of 2.7%, a 5-month low and down from December’s one-year high of 3.0% and the peak of 18.0% in September 2022.
- Moldovan CPI inflation fell back a half percentage point to 8.6% in February from January’s 17-month high, but it remains well above 3.3% last May.
- In Hungary, an autocratically run country that Trump often cites in a highly enlightened way, consumer price inflation rose to a 15-month high of 5.6% last month, including a 14-month high for core inflation of 6.2%.
- Croatian producer price inflation rose to a 17-month high last month, but it was only at 0.5%.
Turkish retail sales in January rose 2.0% on month and 12.5% from January 2024, which was the smallest year-on-year increase in seven months.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Chinese auto sales, Japanese GDP, U.S. small business sentiment
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