Better Tone in Stocks

June 13, 2017

Australian stocks rallied 1.7%, led by financials. A rebound in technology has lifted other stock markets. China and Hong Kong bourses closed up 0.4%. South Korea’s Kospi climbed 0.7%. Indonesian and Singapore markets rose 0.3%. The German Dax, Paris Cac and British Ftse are up 0.5%, 0.4% and 0.1%. Japan’s Nikkei lost 0.1%, however, and remains under 20K.

10-year British gilt, German bund and Japanese JGB yields rose 2, 5, and 1 basis points.

Sterling rose 0.4%. So far Prime Minister May has managed to control the post-election process of forming a coalition government.

The dollar has risen 0.3% against the yen but is unchanged versus the euro.

Gold is down 0.4%. Oil is up 0.4%.

German wholesale prices dropped 0.7% last month, reducing the 12-month increase to a 5-month low of 3.1% from 4.7% in both March and April.

Investor sentiment toward Germany according to the ZEW expectations index dropped back 2.0 points to a 2-month low of 18.6 despite the highest indication of current conditions since July 2011. The ZEW expectations and current conditions indices for all of Euroland both moved even higher.

Japan’s Ministry of Finance reported quarterly business sentiment. For large firms, both manufacturing and non-manufacturing recorded negative readings in the second quarter after positive ones in 1Q, but there is optimism that the second half of 2017 will see significant improvement.

The National Australia Bank’s monthly indices of business conditions dipped a point and business confidence fell six points to 12 and 7, respectively. Each reading represented a 2-month low.

British inflation in May exceeded expectations. The 12-month rise of consumer prices rose to 2.9% from 2.7% in April and 2.3% in March, and core CPI was at 2.6% after 2.4%. RPI inflation accelerated to 3.7% from 3.5%, and PPI-O inflation held steady at 3.6%. The government’s gauge of house price inflation accelerated to a 2-month high of 5.6% in April from 4.5%.

In the U.S. Jeff Sessions will be testifying today before the Senate Intelligence Committee. The FOMC will be in day 1 of a 2-day policy meetings that’s likely to raise interest rates. Small business sentiment will be reported by the NFIB index. U.S. producer price data arrive, too.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


Tags: , , ,


Comments are closed.