Middle Eastern Uncertainty Ramps Even Higher
May 20, 2024
The wreckage of the helicopter carrying Iranian President Raisi, Foreign Minister Amirabdollahian and other key officials has been found in dense mountainous terrain with no survivors. The accident was initially attributed to “technical failure,” but these are early and uncertain days of mourning for Iran. Acting officials have been appointed, and a presidential election is to be held within 50 days.
The price of gold hit a new record high of $2,454 per ounce and is 0.6% above Friday’s close.West Texas Intermediate crude oil touched an intra-day high of $80.39 per barrel but currently shows a net 0.3% dip of 0.3%. Bitcoin’s price rose 1.1%.
Some European markets are closed for the religious Whit Monday holiday, such as those in Hungary, Switzerland, Denmark, Norway, Iceland, and Malta. Among those centers open today, share prices show modest gains of 0.4% in Germany, 0.5% in France and 0.2% in the U.K., but a drop of 1.4% in Italy. In Asia, stock markets rose 0.7% in Japan, 0.4% in Hong Kong, 0.6% in South Korea and 0.5% in China where the People’s Bank of China’s 1- and 5-year Loan Prime Rates were left unchanged at 3.45% and 3.95% after this month’s fixing. The 5-year LPR had been cut by 25 basis points three months ago, while the 1-year LPR has been at the current level since a 10-bp reduction in August 2023.
Ten-year Japanese JGB and British gilt yields are 3 and 1 basis firmer to start this week, while the U.S. 10-year Treasury yield is a basis point lower.
The dollar has hardly reacted to the death of Iran’s hard-line president, ticking up 0.1% against the euro, loonie, yen, and sterling and gaining somewhat more relative to the Australian and New Zealand currencies. On Wednesday, the Reserve Bank of New Zealand will conclude a scheduled review of monetary policy.
Japan’s tertiary index, a barometer of service sector worker sentiment, slumped 2.4% on month in March, resulting in a 0.6% year-on-year decline, which compares unfavorably with on-year advances of 1.1% in the first quarter and 1.9% in calendar 2023.
Real GDP in Thailand grew 1.1% on quarter in 1Q 2024, but its on-year pace of 1.5% was lower than that of 1.9% in calendar 2023.
Indonesia’s current account deficit almost doubled last quarter to $2.16 billion, equivalent to roughly 0.6% of GDP and twice the -0.3% external deficit-to-GDP ratio in all of 2023.
Taiwan’s current account surplus of $29.11 billion last quarter was 51% wider than a year earlier.
Consumer confidence in Spain improved two index points in April to an 8-month high.
Over the 12 months through April, producer prices rose 0.8% in Portugal, the most in a year. Estonian producer prices fell 2.9%, the least in 3 months. Czech producer prices swung from zero percent change from a year earlier in March to a 1.4% rise in April, and Georgian producer price inflation accelerated from 4.0% in March to a 19-month high of 5.9% last month.
The Rightmove index of British house price inflation slowed to a 3-month low of 0.6% in April from 1.7% in March.
A commencement address at Georgetown Law School delivered by Fed Chairman Powell failed to comment on U.S. monetary policy.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: death of Iran's president, Japanese tertiary index, Whit Monday holiday
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