Focus Remains on Greece and China
July 7, 2015
There will be a summit today of eurozone leaders where the Greek government will submit its post-referendum proposal for a debt plan. Many in the rest of Europe just want Greece to leave the common currency area, and the ECB has refused to increase Greece’s emergency aid under the ELA.
Chinese share prices tumbled another 1.8%, while equities fell 2.7% in Hong Kong, and 0.7% in South Korea. In contrast, markets closed up 1.3% in Japan and 1.9% in Australia. In Europe, stocks are lower, with declines so far amounting to 0.6% in France, 0.4% in Germany, 0.3% in Spain, and 0.2% in Britain.
The dollar rose 0.7% against the euro, touching an overnight high of $1.0946. The dollar also advanced 1.0% versus sterling, 0.9% relative to the Australian dollar, 0.6% vis-a-vis the Swiss franc and New Zealand dollar, and 0.4% against the Canadian dollar. Canadian and U.S. trade statistics get released today. The dollar is unchanged relative to the yuan and yen.
Ten-year sovereign debt yields have extended their declines by 10 basis points in Great Britain, 20 bps in Australia, 4 bps in Italy, and 3 bps in Japan, Spain and Portugal.
West Texas Intermediate oil rebounded 1.1% to $53.12 per barrel. Comex gold slipped 0.4% to $,165.73 per troy ounce.
The Reserve Bank of Australia’s official cash rate, which had been cut by 25 basis points each in February and May, was left at 2.0%, a record low. The released statement was similar to that in June but with the additional mention of the situations in China and Greece.
Australia’s construction purchasing managers index fell 1.4 points to a 4-month low of 46.4 in June, marking the eighth sub-50 reading in nine months.
German industrial production was unchanged in May, and April’s increase was revised to 0.6% from 0.9%. Output was 2.3% higher than a year earlier and posted a 0.4% increase between the average levels in 1Q and April-May.
British industrial production advanced 0.4% in May, surprising analysts who forecast a marginal decline. Output was lifted by a 7.3% leap in energy, while manufacturing fell by a greater-than-anticipated 0.6%. Production posted a 2.1% rise between May 2014 and May 2015.
In other industrial production May results reported today, output in Denmark fell 2.9% on month and 1.2% on year in May. Hungarian production slid 0.2% on month but climbed 6.2% on year. Norwegian output went up 0.7% on month and 4.2% on year. And Czech output fell 0.5% on month but posted a 4.6% working day-adjusted increase on year.
The French trade deficit increased 21.5% in May to EUR 4.02 billion, as imports rose 1.2% on month but exports slid 0.6%. Swiss unemployment remained at a low 3.3% in June. Czech retail sales were 6.6% greater in May than a year earlier. Austrian wholesale prices dropped 2.5% in the year to June. Consumer prices in Cyprus were 2.1% lower in June than a year before.
Business sentiment in New Zealand dropped to a reading of 5 last quarter from 23 in 1Q15.
Filipino consumer prices edged up 0.1% on month and rose 1.2% on year in June, while producer prices were 4.4% lower in May than a year earlier.
Japanese international reserves declined $2.82 billion last month. Such fell in four months during the first half of calendar 2015 and by a total of $18.5 billion between December and June.
Besides the aforementioned release of trade data, scheduled U.S. releases today include the JOLTS report of job hires and separations, consumer credit,, and the IBD/TIPP optimism index.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.