Deepening Market Pessimism

June 10, 2016

Share prices fell 1.9% in Hong Kong and 0.9% in Australia.  Declines so far in Europe range from 1.5% to 2.1% in Germany, Britain, Spain, and France.  China and Taiwan markets were again closed for the Dragon Boat Festival.

Ten-year bond yields dropped three basis points in Japan, and the futures 10-year Treasury indicates a 1.65% yields, down 4 basis points.  The 10-year bund and gilt yields slipped another basis point.

West Texas Intermediate oil fell 1.6% and through $50 to $49.75 per barrel.  Metal prices are lower.

The dollar’s reaction is comparatively muted and is quoted currently at 1.1291 per euro and JPY 106.8.

Japan’s tertiary index of service sector activity recovered 1.4% in April, its largest on-month advance in over a year. A 0.8% on-year increase was the most in six months.

Japanese domestic corporate goods prices edged up 0.2% in May, leaving the 12-month rate of decline unchanged at 4.2%.  In the year to May, import prices fell 13.1%, and exports prices declined 4.5%.

The preliminary German CPI estimate was confirmed.  Consumer prices in May went up 0.3% on month and 0.1% on year (0.7% excluding energy).

German wholesale prices rose 0.9% in May, slimming the 12-month rate of decline to 2.3% from 2.7% in the year to April.

British construction output fell 3.7% in the year to April in spite of a 2.5% month-on-month recovery.

French industrial production rose faster than expected in April, gaining 1.2% from March but falling 2.9% from a year earlier.

Turkish GDP last quarter climbed 0.8% on quarter and 4.5% on year adjusted for the variation in the number of working days.

The Bank of Russia is holding a policy meeting today, with a chance officials will cut the 11% interest rate.  The U.S. Reuters/U. Michigan consumer confidence index gets released.  Markets are looking ahead to next week’s Federal Reserve and Bank of Japan monetary policy decisions.

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



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