Weaker Euro and Yen but Mixed Movements in Share Prices Overnight

July 28, 2015

China’s Shanghai Composite index dropped another 1.7%, and share prices elsewhere in the Pacific Rim lost 1.2% in Indonesia, 1.0% in Singapore, 0.4% in India and New Zealand, 0.3% in Taiwan and 0.1% in Japan.  In Europe, however, stocks have recovered 1.8% in Italy, 1.5% in Germany, 1.4% in France and 0.7% in Switzerland.  The British Ftse gained only 0.1% so far.

The dollar rose in overnight trading by 0.5% against the euro, 0.4% relative to the yen and 0.3% vis-a-vis the Swiss franc, but it also fell by 0.9% against the kiwi, 0.5% versus the Australian dollar, 0.2% against sterling and 0.1% versus the loonie.  The yuan remains steady.

West Texas Intermediate oil fell 0.8% to $47.03 per barrel.  Comex gold slipped 0.2% to $1,091.91 per troy ounce.

Ten-year German bund and Japanese JGB yields are unchanged.  The 10-year British gilt is two basis points firmer.

British real GDP growth accelerated back to 0.7% last quarter after dipping to 0.4% in 1Q following gains of 0.7-0.9% in each quarter of 2014.  Production and services grew by a solid 1.0% and 0.7% in the second quarter, construction was steady, and agriculture fell 0.7%.  Real GDP was 2.6% higher than in the second quarter of 2014.  On-year growth peaked in 4Q14 at 3.4%.  The monthly index of services rose 0.3% in May and by 0.4% in March-May from the prior three months.

Italian consumer confidence fell 2.8 points to a reading of 106.5 in July.  Analysts had predicted little change.  Business sentiment in Italy edged down 0.3 points to 103.6, matching forecasts.

The on-year growth of Swedish retail sales volume fell 0.1 percentage point to a 6-month low of 3.8% in June.  Nominal sales rose 0.3% on month and 5.6% on year.

Irish retail sales volume dropped 3.9% in June, cutting the 12-month rate of increase to 5.4% from 8.4% in May and 11.9% in April.

Scheduled U.S. data releases today include the Richmond Fed manufacturing index, the Conference Board’s consumer confidence index, the Case Shiller house price index, and preliminary findings from the survey of service-sector purchasing managers compiled by Markit Economics.  Canada will be reporting producer prices and raw material prices.

The FOMC begins a two-day policy meeting.  Tomorrow’s statement will not be followed by a press conference, and no change in policy settings is anticipated.

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

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