Quiet Markets in Absence of U.S. Leadership

July 4, 2014

Overnight dollar movements on this 238-year U.S. birthday amount to 0.2% or less. The notable change is a 1.35 handle on EUR/USD.

Share prices in the Pacific Rim went up 0.6% in Japan and Australia, 0.5% in India, 0.4% in New Zealand and Indonesia but slipped by 0.1% in China and South Korea.  In Europe, stocks have lost 0.7% in Italy, 0.5% in Spain and 0.1% in Paris and Frankfurt.

Key 10-year sovereign debt yields are steady, too.

Among commodities, WTI oil slid 0.2% to $103.82 per barrel, while Comex gold firmed 0.1% to $1,322.40 per ounce.

Euroland’s retail purchasing managers index edged up 0.1 to a 2-month high of 50.0, thanks to a 41-month peak in the German component, which rose 3.7 points to 56.2.  The French retail PMI fell by 2.9 points to a 6-month low of 47.6, while Italy’s index declined 2.0 points to a 4-month low of 43.2.

The German construction purchasing managers index sank 2.6 points to a 15-month low of 45.5, marking a third straight reading below the 50 no change line.

After a 3.4% increase in April, German industrial orders fell 1.7%, paring the prior gain in half.  Domestic demand for capital goods, a gauge of future business investment, dropped 2.7% in May and was just 0.3% greater in April-May than in 1Q.  Total orders recorded a 5.5% 12-month increase.

British car sales increased 6.2% between June 2013 and June 2014.

Czech retail sales were 0.6% lower in May than a year earlier. 

In Sweden, where an aggressive easing of monetary policy was announced yesterday, industrial production far underperformed expectations in May, dropping by 3.2% on month and 2.2% on year.  Hungarian production, in contrast, advanced by 9.6% over the year to May. 

The Hong Kong private purchasing managers index printed at a three-month high in June of 50.1 following an 11-month low of 49.1 in May.

In the year to June, Filipino consumer prices climbed 4.4% overall and 2.8% among core items, while producer prices in May were 1.0% lower than a year earlier. Indonesian consumer confidence slid 0.5% in June.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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