Lots of Data and Another Drop in China’s Stockmarket

July 30, 2015

The dollar rose overnight by 1.0% against the kiwi, 0.4% versus the yen, Swissie and Australian dollar, and 0.2% relative to the loonie, euro and sterling.  The yuan continues to be held steady, but Chinese stocks slumped 2-3%.

in other Pacific Basin markets, equities dropped 1.1% in Singapore, 0.9% in South Korea and 0.6% in Hong Kong but climbed 0.9% in Japan, 1.0% in Taiwan and 0.8% in Australia.  Share prices in Europe are down 0.6% in Spain but up 0.6% in France, 0.5% in Germany, Italy and Switzerland, and 0.2% in Great Britain.

Ten-year British gilt and Japanese JGB yields firmed a basis point each, while the German bund held unchanged.

Comex gold fell by 0.9% to $1,087.09 per ounce.  WTI oil rose 1.0% to $49.27 per barrel.

There’s been a sixth straight 50-basis point increase in the Central Bank of Brazil’s Selic interest rate, which at 14.25% is now at its highest point since October 2006 and 700 basis points greater than prior to April 2013.  Real depreciation has fanned accelerating inflation.

Japanese industrial production rose 0.8% in June, beating expectations slightly.  Output was 2.0% greater than in June 2014.  Motor vehicle production was 5.3% less than a year earlier, however. 

Japanese stock and bond transactions generated a JPY 407 billion net capital inflow last week after a JPY 521 billion net outflow in the previous week.

German labor statistics were mixed.  While the jobless rate stayed at 6.4% for a fourth consecutive time in July, the level of unemployment jumped 9K in seasonally adjusted terms, defying expectations of a 5K drop.  Employment rose 0.4% in the year to the second quarter , down from a 1.0% in the previous year to the second quarter of 2014.

In July, on-year inflation slowed in the German states of Bavaria, Brandenburg and North Rhine Westphalia but rose in Hesse.  In all four cases, the change in prices was slightly above zero.

Several countries reported GDP dataSwedish real GDP rose 1.0% on quarter in 2Q, most since 3Q13, and accelerated to an on-year pace of 3.0% from 2.5%.  In Spain, GDP also went up 1.0% on quarter and rose 3.1% between 2Q14 and 2Q15.  On-year Austrian growth stayed at a low 0.4%. Irish GDP accelerated.

Eurozone confidence indices were reported for July.  The economic sentiment index increased 0.5 points to 104.0, best since July 2011.  Consumer confidence weakened 1.5 point to a 6-month low of -7.1.  Industrial sentiment improved 0.5 to a 4-month high of -2.9.  Construction printed 0.3 points better at a 9-month high of -23.9.  Retail confidence rebounded 2.3 points to 1.0, a 2-month high.  Sentiment in services advanced a full 1.0 point to 8.9, and the business climate index, 0.39, was at its highest level since May 2014.

Austria’s manufacturing purchasing managers index went up 1.2 points in July to a 17-month high of 52.4, marking the fourth straight reading above the 50 line of demarcation between expansion and contracting activity.

Ireland’s current account surplus narrowed 33% on quarter.

Portuguese retail sales and industrial production grew 2.4% and 2.7%, respectively, between mid-2014 and mid-2015.  Consumer confidence in Portugal registered its highest reading since April 2002.  Overall business sentiment also rose marginally, but manufacturing sentiment slid a bit in July.

The Swiss index of leading economic indicators leaped 10 points to 99.8 in July from 89.8 in June.

Norwegian retail sales in June went up 1.0% on month but was still 0.1% lower than a year before.  Danish unemployment stayed level at 4.7% last month.

Greek producer price deflation deepened to an on-year drop of 5.7% in June from 4.6% in May.  Belgian consumer prices increased marginally less than 0.5% in the year to July.

Australian import prices advanced 1.4% on quarter and 1.3% on year in the second quarter, while export prices slumped by 4.4% from 1Q and 8.9% from the second quarter of 2014.  RBA officials want more Aussie dollar depreciation to counterbalance the sharp drop in Australia’s terms of trade.

Building permits in Australia sank 8.2% on month in June, cutting the 12-month increase to 8.6% from 18.3% in the year to May.  These results were considerably worse than forecast.  New Zealand building permits fell 4.1% on month and rose just 2.0% between June 2014 and June 2015.

Scheduled U.S. data to be released today feature the first estimate of 2Q15 GDP and include benchmark revisions to GDP and weekly jobless insurance claims.  The Bank of Mexico holds a policy meeting today.

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

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