U.S. Political Landscape Goes Deeper into the Rabbit Hole

May 12, 2017

President Trump gave an entirely different explanation for the firing of the FBI director than had other officials earlier. Democrats are crying foul while Republicans are standing by their man.

Euro area industrial production fell 0.1% in March for a second straight month, undershooting expectations. Output was unchanged in the first quarter and also flat between December and March.

German GDP went up 0.6% last quarter and posted a 1.7% on-year advance. German consumer prices were unchanged on month in April and accelerated to a 2-month on-year high of 2.0%.

Japanese M2 money growth of 4.3% in April was the highest in at least a year.

Group of Seven finance ministers began a 2-day meeting in Italy.

The National Bank of Serbia left its key interest rate unchanged at 4.0%, the level since July 2016 when such was cut by 25 basis points. Way back in March 2013, the rate was 12.25%.

Bank Negara Malaysia left its key rate at 3.0%, citing its expectations that inflation will remain in target (1.5-4.5%) over the coming two years.

New Zealand’s Performance of Manufacturing index fell 1.2 points to a 2-month low of 56.8 in April.

The dollar is little changed ahead of the release of U.S. CPI, retail sales and the  U. Michigan consumer sentiment index.

The German Dax and British Ftse are up a tad, while the Japanese Nikkei lost 0.4%. U.S. stocks are looking vulnerable. Corporate earnings have been weaker than hoped especially for department stores, and the political climate keeps getting more polarized.

The ten-year British gilt is down 3 basis points, and its Japanese and German counterparts slipped a basis point each.

Oil is flat, while gold firmed 0.3%.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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