Oil Down, Dollar Up on a Lean Day for Data

July 11, 2017

West Texas Intermediate crude oil sank 0.9% to $44.01 per barrel, snuffing out yesterday’s nascent recovery. Comex gold fell 0.3% to $1,209.20.

The dollar also advanced against other paper currencies, rising 0.8% versus the kiwi, 0.7% relative to the Australian dollar, 0.3% vis-a-vis the Mexican peso, Swiss franc and yen, and 0.2% against the loonie. The dollar is unchanged against the euro and yuan and 0.2% softer versus sterling.

In the Pacific Rim, equities rose 1.9% in Hong Kong, 1.2% in Taiwan, 0.6% in Japan, New Zealand and South Korea but dropping 0.9% in Singapore and 0.3% in China. The tone worsened in Europe, where share prices have fallen by 0.8% in the U.K., 0.6% in Switzerland, 0.3% in Spain, and 0.1% in France. In Germany and Italy, by contrast, stocks have firmed 0.2%.

The ten-year German bund and British gilt yields are a basis point higher.

Some investors worry that central banks are moving forward on policy normalization even though recent price and growth data give some pause to whether this is the optimal time for doing so. But data released today have been supportive.

British same store sales posted a reassuring 1.2% on-year advance in June following May’s drop of 0.4%. The result was better than forecast.

Business conditions in Australia rebounded to a 5-month high in June with a reading of 15 after May’s score of 11. Business confidence according to NAB ¬†went up a point to a 2-month high of 9. Home loans rose 1.0% in May after posting declines in March and April.

A 0.7% rise in Italian industrial production was twice as large as forecast and more than reversed the prior month’s decline. The on-year rate of increase tripled to 2.8%.

Consumer confidence in Ireland jumped 4.5 points to a 16-month high in June following May’s 5-month low.

In the year to June, CPI inflation decelerated to 1.9% in Hungary but picked up to 0.9% in Romania. Cypriot inflation remained at 0.9%.

Turkish retail sales grew 1.2% between May 2016 and May 2017, which was the most in a year.

Scheduled U.S. data today are the Labor Department’s JOLTS index, NFIB’s small business sentiment index, and Treasury-compiled capital flows. Janet Yellen, Chair of the Fed Board of Governors, testifies tomorrow on the economy and monetary policy before the House banking committee. The Bank of Canada will reveal its latest policy decision tomorrow as well and publish an updated Monetary Policy Report. There’s a chance the central bank interest rate may get raised.

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

 

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