Week Starts on a More Stable Footing

August 4, 2014

The dollar is unchanged against the euro, Swiss franc, Australian dollar, yuan and sterling.  The dollar is also 0.1% firmer against the yen, loonie and kiwi.

The 10-year German bund yield rose a basis point, while its Japanese and British counterparts are a basis point lower.  A bailout of Portugal’s Banco Espinto Santo has been arranged.

Gold is unchanged at $1,294.50 per ounce.  WTI oil has risen a mere 0.1% to $97.98 per barrel.

In the Pacific Rim, share prices recovered 2.0% in China, 1.0% in India, 0.7% in Taiwan, 0.6% in Indonesia, 0.4% in South Korea and 0.3% in Hong.  Stocks in Japan and Australia slipped 0.3%, by contrast.  Equities in Italy, France, Britain, and Spain show gains of 0.4-0.8%.  The German Dax is only 0.2% firmer.

The Bank of Japan’s balance sheet grew 11.2 billion yen, or 4.3%, in July and by 20% over the first seven months of 2014.  Japan’s monetary base recorded on-year growth of 42.7% in July, less than its expansion rates of 45.5% in 2Q and 54.1% in 1Q.

Australian retail sales rose 0.6% in June, most since January, but retail sales volume slid 0.2% in the second quarter.  Aussie job ads went up 0.3% in July after their surge of 4.4% in June.  The TD-MI gauge of expected Aussie inflation over the coming 12 months slowed to 2.6% in July from 3.0% in June.

In the euro area, producer prices rose 0.1% in June, trimming the on-year slide to 0.8% from 1.0% in May.  June’s gain was led by a 0.5% rise in energy producer prices.

The British construction purchasing managers index in July eased 0.2 points to a 2-month low of 62.4.  Such has been at 60.0 or higher every month this year.

China’s non-manufacturing PMI fell by 0.8 points to a six-month low of 54.2 in June.  Both jobs and export orders contracted.

The Swiss manufacturing PMI rose 0.3 points to a three-month high of 54.3 in July.

The Sentix measure of investor sentiment toward the euro area slumped 7.4 points to 2.7 in August, the lowest reading in at least ten months.  Analysts had anticipated only a one-point dip.

Romanian PPI inflation slowed to 0.3% in June from 0.8% in May. Romania’s central bank unveils its latest interest rate decision shortly.

Turkish CPI inflation accelerated in July to 9.3% from 9.2% the month before.  Turkish producer prices were 9.46% higher than a year before in July.

Indonesia recorded a $0.3 billion trade deficit in June but also saw CPI inflation fall to 4.56% in July.

Release of the New York area PMI, the so-called NAPM index, is scheduled today.  The Reserve Bank of Australia’s monthly interest rate announcement is set for Tuesday.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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