Growth Outlook Weighing on Investor Psychology

July 16, 2012

The dollar has risen by 0.5% against the euro, 0.4% versus the Swiss franc, 0.2% relative to sterling, and 0.1% against the Australian dollar, but the greenback also lost 0.1% against the kiwi and yuan and 0.3% vis-a-vis the yen.

Premier Wen said the slowdown in China’s economy may last for some time.

Hardline remarks by German Chancellor Merkel about quid pro quos for the regional bailout fund has dampened optimism about an end to the crisis.

Japanese markets were closed for the Marine Day holiday.

Share prices fell by 2.1% in China and are 0.7% lower in Spain.  The German Dax and British Ftse are unchanged.  Stocks declined 0.8% in new Zeanad and by 0.6% in India.

Ten-year British gilt and German bund yields slipped by three and two basis points.

Oil and gold prices have dropped by 0.7% to $86.74 per barrel and 0.4% to $1585.20 per ounce.

The British Rightmove house price index fell 1.7% in July, most for this month in four years.  But a 2.3% increase from a year earlier was recorded.

The Russian Central Bank left its key interest rates unchanged, including the 8.0% refinancing rate, unchanged but modified remarks about future policy to suggest that a tightening may occur before long.

Euroland consumer prices dipped 0.1% in June and retained a 12-month 2.4% rate of increase.  The ECB targets such at below but close to 2.0%.  Energy prices slumped 1.7% on the month.  Core consumer prices ticked 0.1% higher on month and remained steady at 1.6% on year.

Euroland’s seasonally adjusted trade surplus widened from EUR 4.5 billion in April to EUR 6.3 billion in May, the largest surplus since December.  Imports fell 0.9% on month, while exports went up 0.3%.  The unadjusted surplus in January-May was EUR 11.0 billion versus a deficit of EUR 24.5 billion in the first five months of 2011.  Exports rose 7.4% on year, three times greater than imports.

Turkish consumer confidence softened to 91.8 in June from 92.1 in May and a reading of 93.9 in March.Turkey’s 9.0% jobless rate in April was down from 9.9% in April 2011.

Indian WPI inflation slowed unexpectedly to 7.25% in June from 7.55% in May. 

Italy posted a EUR 1.008 billion trade surplus in May following an EUR 0.2 billion deficit in April.  Norway had trade surpluses of NOK 29.53 billion in June and NOK 242.5 billion in the first half of 2012.  The 1H surplus was 11.4% wider than a year earlier.

Swiss industrial production contracted 0.7% in the first quarter after a 7.9% advance in 4Q11.  Production in 1Q was 1.4% greater than a year earlier.  However, industrial orders fell by 3.6% between 1Q11 and 1Q12. 

Danish producer price inflation slowed to 1.2% in June from 2.0% in May.  Austrian CPI inflation ticked up to 2.2% in June from 2.1% in May.

Scheduled U.S. data releases today feature retail sales and also include the Empire State manufacturing index and business inventories.  On Tuesday, Fed Chairman presents Humphrey-Hawkins testimony before the Senate Banking Committee, which will be reprised in the House on Wednesday.  Canadian data releases today are existing home sales and the report on securities transactions.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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