Stocks and Dollar Mostly Retreat in Choppy Markets

June 27, 2017

The dollar declined overnight by 0.8% against the euro, 0.7% relative to the Swiss franc, 0.4% versus the yuan, 0.3% relative to the Australian dollar and sterling and 0.2% vis-a-vis the kiwi and loonie. The dollar is unchanged against the Japanese yen and 0.3% firmer relative to the Mexican peso.

Today’s main event will be a speech by Fed Chair Janet Yellen. Remarks yesterday by ECB President Draghi expressed optimism that Euroland’s recovery will continue to broaden.

Some markets like Indonesia and Malaysia remained closed for the end of Ramadan. In Pacific Rim markets that were opened, share prices fell 1.9% in Taiwan, 0.8% in India, and 0.1% in Japan, Hong Kong and Australia. European equities show losses of 0.6% in France, 0.4% in Grmany and Greece, 0.3% in Switzerland, and 0.1% in Spain and Italy. The British Ftse is unchanged thus far.

West Texas Intermediate crude oil continued to rebound, rising 1.0% to $43.81 per barrel. Comex gold climbed 0.4% to $1,251.80 per ounce.

10-year German bund and British gilt yields are respectively six and four basis points higher than yesterday.

Industrial profits in China recorded a 16.7% on-year advance in May, closer to April’s rise of 14.0% than March’s 23.8 increase but well above an 8.5% average advance in 2016.

Italian consumer confidence and business sentiment each improved to a two-month high in June.

In Britain, the CBI distributive trades index showed retailing advance to a reading of 12% from 2%.

Swedish producer prices were flat on month but 7.2% higher on year in May. Sweden’s trade balance swung from a deficit in April of SEK 3.2 billion to a surplus in May of SEK 2.8 billion. The January-May trade balance had a minuscule SEK 0.1 billion deficit versus a SEK 1.3 billion surplus a year earlier.

New Zealand posted a small NZD 103 million trade surplus in May after a downwardly revised surplus of NZD 536 million in April. Over the last reported twelve months, however, there was a deficit if NZD 3.754 billion.

Officials at the Central Bank of Sri Lanka left their key deposit and lending rates unchanged at 7.25% and 8.75% after last week’s policy meeting. There had been two 50-basis point rate hikes last year in February and July, and now inflation shows signs of settling back toward mid-single digits.

U.S. data arriving today include consumer confidence, the Richmond Fed manufacturing index, the Case-Shiller house price index, and weekly chain store sales measured by Redbook.

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


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