Mixed Data and a Couple of Central Bank Meetings

July 23, 2013

The dollar rose 0.4% against the yen, drawing very near the 100 threshold.  The dollar otherwise has dropped 0.3% against the loonie, which was supported by strong Canadian retail sales figures.  The dollar has firmed 0.2% against the Swiss franc and 0.1% versus the kiwi and Aussie dollar but has edged down 0.1% relative to the euro and yuan.  Sterling is steady.

There were strong stock market advances of 2.9% in China, 2.3% in Hong Kong, 1.9% in Indonesia, 1.6% thus far in Spain, 1.4% in Taiwan and 1.3% in South Korea. Japan’s Nikkei closed up 0.8%, but equities are down 0.3% in France and 0.2% in Germany.  U.S. stock indices are narrowly mixed.

Ten-year U.S. Treasury and British gilt yields are three and five basis points higher, while the Japanese JGB dipped another basis point to 0.77%.

Gold and oil are 0.3% and 0.1% softer at $1331.50 per ounce and $106.89 per dollar.

Hungary’s central bank enacted another 25-basis point cut in its two-week repo rate to 4.0%.  The rate has been cut every meeting for a year from a level of 7.0% in early August 2012.  The bottom seems to be drawing near.

Turkey’s central bank lifted the overnight lending rate by 75 basis points to 6.25% while holding its other key interest rates steady.  The action was taken after prior news of a spike in inflation to over 8.0%.

According to the French statistical agency, INSEE, business sentiment in France jumped two points to 95 in July from 93 in June, 92 in May and a reading of 88 in April.

Preliminary figures showed that consumer sentiment in the euro area improved 1.3 points to a reading of minus 17.4, a 2-year high.

Canadian retail sales jumped 1.9% in May, five times faster than in April, and the on-year increase doubled to 3.6%.  Non-auto sales rose 1.2% on month after dipping marginally the month before.

Spain’s recession was less intense last quarter when GDP dipped just 0.1% versus a 0.5% slump in 1Q.  It was the eighth straight contraction and left GDP 1.8% smaller than in 2Q12.  Polish retail sales growth accelerated to a 12-month increase of 1.8% in June from 0.5% in May.

Weekly ICSC and Redbook figures showed stronger U.S. chain store sales last week than in the prior week of July 13.

According to the British Bankers Association, mortgage applications in the U.K. rose by less than anticipated to 37.28K in June from 36.29K in May.

The Richmond Fed manufacturing index deteriorated by 19 points to a score of negative 11 in July.

The FHFA index of U.S. home prices went up 0.7% on month and by a greater-than-anticipated 7.3% from May 2012.

For a third straight month, Japan’s government upgraded its economic assessment, now declaring that the economy is picking up steadily and shows some movement on the way to recovery.  Industrial production, business sentiment, and investment spending received more sanguine characterizations, and the report also said that “deflation is easing.”

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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