Global Stocks Higher after French Parliamentary Electioon

June 19, 2017

Share prices advanced 1.2% in Hong Kong, 0.9% in Taiwan, 0.8% in India, 0.7% in China, 0.6% in Japan and New Zealand, 0.5% in Australia and Singapore, and 0.4% in South Korea. Equities in Europe have thus far gained 1.5% in Greece, 0.9% in France, 0.8% in Germany and Spain and 0.6% in Great Britain.

The dollar is narrowly mixed. 

Gold’s downtrend was extended by 0.3% to $1,252.40 per ounce.

WTI crude oil recovered 0.4% but remains below $45 at $44.91 per barrel.

The ten-year German bund yield edged up a basis point, while its British and Japanese counterparts are unchanged.

The transformation of French national politics was solidified, as President Macron’s En Marche movement captured a comfortable coalition majority of the National Assembly, winning 350 of 577 seats. However, record low turnout of 42% cast doubt over how enduring this reconfiguration will prove.

In other geopolitical developments,

  • British Brexit talks with the European Union begin today.
  • There is continuing confusion over whether U.S. President Trump is under investigation in connection with Russia’s attempt to influence the 2016 election.

Japan’s customs trade balance moved unexpectedly to a JPY 203 billion deficit in May, the first unadjusted shortfall in a month other than January since August 2016. The seasonally adjusted surplus fell to 34 billion yen from 158 billion yen in April and a 2017 monthly high of JPY 612 billion in February. On-year 14.9% growth in exports and 17.8% growth in imports were both in double digits and faster than April’s results.

Property price inflation in China slowed marginally to 10.4% in May from 10.7% in April and 12.6% back in November. House prices increased 0.7% on month.

Construction output in Euroland rose 0.3% on month and 3.2% on year in April. In the first quarter, construction output had risen 0.9% from the 4Q16 level and 1.8% compared to a year earlier.

New Zealand’s service-sector purchasing managers index rebounded 5.6 points to a 2-month high in May of 58.8. Consumer confidence in that economy bounced back to a reading of 113.4 in the second quarter of 2017 according to the Westpac measure from 111.9 in 1Q17, 113.1 in the final quarter of 2016, and 106.0 in the second quarter of 2016.

Australian motor vehicle sales grew robustly in May, advancing 2.9% on month and 4.9% on year.

House price inflation in the U.K. decelerated to 1.8% in June according to the Rightmove index, the smallest on-year reading of the first half of 2017. Prices also dipped 0.4% compared to May’s level.

South Korean PPI inflation slowed to 3.5% last month from a downwardly revised 3.8% in April.

New York Fed President Dudley and Chicago Fed President Evans will be speaking publicly today.

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

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