Stocks Up, Sterling Up and Dollar Mostly Down

June 7, 2016

Sterling recovered around 1%.  Today’s released polls showed voters narrowing favoring staying in the EU, whereas yesterday’s releases gave an edge to the “leave” camp.

The dollar otherwise is down 1.0% against the Australian dollar, 0.4% versus the Swiss franc, 0.3% relative to the kiwi and loonie but unchanged against the euro and 0.1% higher against the yen and yuan.

The Reserve Bank of Australia left its official cash rate unchanged at 1.75%.  Last month saw a 25-basis point cut, the first change in a year.  The decision lifted the Aussie dollar today.

The Reserve Bank of India kept its interest rate at 6.5% on the repo and 6.0% in the reverse repo.  These are 5-year lows following cuts made in April.  Like the Australian currency, the rupee rallied on today’s no change decision.

Share prices climbed 1.3% in South Korea, 1.9% in Hong Kong, 1.9% in Taiwan, 0.6% in Japan and 0.9% in India.  Stocks in Europe have so far risen 1.7% in Italy and Germany, 1.4% in Greece, 1.2% in France, 1.0% in Spain but just 0.4% in the U.K..

West Texas Intermediate oil edged up 0.3% to $49.94 per barrel, while comex gold is down 0.3% at $1,244.00 per ounce.

Ten-year British gilt and Japanese JGB yields are a basis point firmer.  The German bund is steady.

Eurozone GDP growth last quarter was revised to a 0.6% increase from 4Q15 and an on-year 1.7% advance.  Between the adjacent quarters, investment climbed 0.8%, consumption rose 0.6%, government spending increased 0.4%, net exports exerted a 0.1 percentage point drag, but inventories augmented growth by 0.1 percentage point.

German industrial production recovered 0.8% in April after dropping 1.1% in March.  April’s level was 0.2% below the 1Q mean but 1.2% higher than in April 2015.

Japanese international reserves fell $8.5 billion last month but rose $20.8 billion over the first five months of this year.  Japan’s index of leading economic indicators rose 1.4 points to 100.5, a 5-month high.  The index of coincident economic indicators also bounced higher, but officials still characterized its trend as “weakening.”

Australia’s construction purchasing managers index fell back 4.0 points to a 2-month low of 46.7 in May, marking the fifth sub-50 reading in the last six months.

Same store sales in the U.K. were 0.5% higher in May than a year earlier after posting on-year declines in both March and April.  The Halifax British house price index increased 0.6% in May and recorded the same 9.2% on-year advance in March-May as in February-April.

In April, France posted a EUR 2.8 billion current account deficit and a EUR 5.22 billion trade shortfall.

In the year between 1Q15 and 1Q16, Romanian and Icelandic GDP rose 4.2%, but Hungary’s on-year GDP gain slowed sharply to only 0.9%.

Spanish industrial production was unchanged on month but up 2.7% on year in April. Norwegian production exceeded its April 2015 level by 3.2%.

Scheduled U.S. data today are quarterly productivity and unit labor costs and monthly consumer credit and the IBD/TIPP optimism index, and weekly chain store sales.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

 

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