Monthend Finds Dollar and Stocks Mixed and Commodities Lower

July 31, 2015

With July drawing to an end, the dollar rose overnight by 0.8% against the kiwi, 0.5% versus the Aussie dollar, 0.,2% relative to the loonie and 0.1% against the yen and sterling.  But the dollar also fell 0.7% against the Swiss franc and 0.4% vis-a-vis the euro.  The yuan is steady.

The Shanghai Composite index of Chinese stocks dropped another 1.1%. Stocks also declined 1.5% in Singapore and are down somewhat in Spain, the U.K. and Italy.  Equities rose 1.9% in Indonesia, 1.5% in India, 0.6% in New Zealand, 0.6% in South Korea, 0.5% in Australia 0.4% in Hong Kong and 0.3% in Japan.  Stocks have risen 0.2% in Switzerland, 0.3% in France and 0.1% in Germany.

West Texas Intermediate crude oil slumped 2.0% to $47.54 per barrel.  Comex gold is 0.7% weaker at $1,080.82 per barrel.

Ten-year German bunds and Japanese JGBs are steady.  The 10-year British gilt yield has firmed a basis point but remains below 2.0%.

Japan’s jobless rate unexpectedly rose 0.1 percentage point to 3.4% in June even though on-year employment growth rose to 0.6% and the job offers:seekers ratio edged up to 1.20 from 1.19.

Japanese housing starts posted a significantly greater-than-forecast 16.3% on-year advance in June, most since end-2013.  Construction orders growth also accelerated, reaching a 5-month high of 15.4%.

Japanese real household spending fell 2.0% between June 2014 and June 2015.

Euro area consumer price inflation held steady at 0.2% in July despite a greater on-year drop of 5.6% in the energy component.  Core inflation jumped 0.2 percentage points to 1.0%, most this year and also 0.2 percentage points higher than in July 2014.

Eurozone unemployment stayed at 11.1% in June, but youth joblessness ticked 0.2 percentage points higher to 22.5%.

German retail sales volume fell 2.3% in June and by 0.2% between the first and second quarters of 2015.  Sales rose 5.1% on year, helped by a couple more business days in June 2015 than June 2014.  Greek retail sales rebounded 1.8% in May.

French producer prices slid 0.2% in June and recorded a slightly bigger on-year drop of 1.9%.  Italian consumer prices dipped 0.1% in July, leaving the 12-month rate of increase at 0.2%.  Italian producer prices in June fell 0.2% on month and 2.3% on year.  The Italian jobless rate rose 0.2 percentage points to 12.7% in May.  Producer prices in Hungary advance 1.5% between June 2014 and a year later but posted a 1.0% average on-year drop in the first half of this year.

French consumer spending increased 0.4% in June, most since January, but was 0.1% less than a year earlier.  Spain’s current account swung from a EUR 230 million deficit in April to a EUR 1.15 billion surplus in May. 

Australian producer prices rose 0.3% on quarter and 1.1% on year in 2Q15.  The on-year change had fallen to 0.7% in 1Q from 1.1% in the final quarter of 2014. 

New Zealand business sentiment fell sharply in July to print at -15.3.  M3 money growth in that economy accelerated to 9.5% in June.

The Bank of Mexico’s overnight interest rate was kept at 3.0% for a ninth straight meeting.  Separately, officials decided to support the peso more forcefully.

The Bank of Russia’s main interest rate was sliced by a further 50 basis points to 11.0%.  Cumulative easing from a 17% peak early this year now amounts to six percentage points.  Russian GDP is contracting.

In Asian news, South Korea announced an improvement in business confidence.  Hong Kong retail sales volume was 4.4% greater than a year earlier in June.  Thailand’s current account surplus narrowed 58% to $0.9 billion in June.  Taiwanese GDP growth slowed much more sharply than assumed in the second quarter to 0.64% on year.  Malaysian domestic producer prices fell 6.0% on year, outweighing a 0.6% rise in import prices, in June.

Scheduled U.S. data out today will include the Chicago and Milwaukee regional PMIs, the quarterly employment const index, and the final reading on the U. Michigan consumer sentiment index.  Canada reports monthly GDP.

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

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