Weaker Dollar and Pound

July 23, 2015

The dollar edged 0.1% firmer against sterling but has lost 1.4% against the kiwi, 0.7% relative to the euro, 0.6% vis-a-vis the Swiss franc, 0.4% versus the loonie and Aussie dollar and 0.2% against the yen.  The yuan is steady.

Share prices rose 2.3% in China 0.6% in Hong Kong and 0.4% in Japan but fell 1.4% in Taiwan, 0.5% in New Zealand and India, 0.4% in Australia, and 0.1% in Singapore and Indonesia.  Stocks in Europe recovered 1.1% in Switzerland, 0.3% in the U.K., 0.2% in France and 0.1% in Germany and Spain.

Gold rose back above $1,100, climbing 0.8% to $1,102.45 per ounce.  WTI oil stayed below $50, edging up just 0.1% to $48.22 per barrel.

Ten-year German bund and British gilt yields are two basis points lower.  The 10-year Japanese JGB yield stayed level at 0.40%.

Japan’s trade deficit in June totaled just JPY 69 billion in unadjusted terms, 91.7% less than a year earlier, and JPY 252 billion seasonally adjusted in June following deficits of JPY 155 billion in May and JPY 258 billion in April.  Exports rose 9.5% on year, while imports fell 2.9%.

The Reserve Bank of New Zealand cut its Official Cash Rate to 3.0% from 3.25% and released a statement pointing to more easing ahead.  An initial reduction was engineered in June.

Central bank policy meetings are also being held today in South Africa, Turkey and Mexico.

Another hurdle was cleared for a third Greek bailout.  The Greek parliament voted by a wide 230-63 margin to accept reforms.

British retail sales fell well short of expectations in June, dipping 0.2% on month and slowing to a 12-month 4.0% advance from 4.7% in the year to May.  Sales excluding automotive fuel fell 0.2% from May and rose 4.2% on year.

South Korean real GDP slowed to merely 0.3% annualized in the second quarter on weak exports and consumption.  GDP was 2.2% higher than a year before.

Business confidence in Australia recovered to a reading of +4 in 2Q from zero in 1Q.

Turkish consumer sentiment fell 2.7% in July from a 4-month high in June. 

Danish consumer confidence dipped by 0.3 to 9.5 in July. 

Icelandic consumer price inflation rose to 1.9% in July from 1.5% in June, while PPI inflation slowed in June to 11.0% from 12.5% in May.

Swedish PPI inflation slowed to a 5-month low of 0.5% in June from 1.6% in May.  Sweden’s jobless rate ticked 0.2 percentage points lower to 7.6% last month but was at a 1-year high of 8.5% when not seasonally adjusted.

Spain’s jobless rate fell to 22.4% last quarter form 23.8% in 1Q. 

Scheduled U.S. data releases today involve the Chicago Fed National Activity Index, the K.C. Fed manufacturing index, the Conference Board’s index of leading economic indicators, and weekly jobless insurance claims.  Canada reports retail sales, and Euroland’s preliminary consumer sentiment reading arrives, too.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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