DOW Tops 22K and an Indian Interest Rate Cut

August 2, 2017

The DJIA moved as high as 22,036, topping 22K for the first time ever, but is currently hovering just below that level.

Asia got its first interest rate cut of 2017 as the Reserve Bank of India’s repo and reverse repo rates were reduced 25 basis points to 6.0% and 5.75%, respectively. The reductions had been expected in light of lower inflation and growth in the economy.

The dollar is mostly higher, advancing 0.6% against the kiwi, 0.4% relative to the Swiss franc, 0.3% vis-a-vis the loonie and peso, 0.2% against the yen and 0.1% relative to the yen. The dollar also has dipped 0.2% against the euro and sterling and 0.1% vis-a-vis the Aussie dollar.

Stock markets rose 0.8% in Taiwan, 0.5% in Japan and 0.3% in Indonesia, New Zealand and Singapore but fell 0.3% in India, 0.5% in Australia and 0.2% in China. Equities in Europe are up 0.7% in Switzerland, which had been closed yesterday, but down 0.4% in Spain, 0.3% in the U.K. and 0.2% in Italy and Germany.

Ten-year sovereign debt yields are unchanged in Japan, France, the U.K. and Germany.

WTI oil is flat, too, at $49.17 per barrel, while gold has dipped 0.3% to $1,276.20 per ounce.

ADP estimates that private U.S. jobs rose 178K last month, slightly less than expected.

Producer prices in the euro area dipped 0.1% on month in June, marking the fifth consecutive month when such failed to rise. The 12-month rate of rise in the PPI fell to 2.5% from 3.4% in May and 4.3% in April. Energy prices slipped 0.3% on month, while all other producer prices were collectively unchanged. The biggest global economic phenomenon of 2017 has arguably been the persistence of subdued inflation.

Swiss retail sales volume rose 0.8% on month in June and 1.5% on year. Nominal sales were 1.1% higher than a year earlier. Swiss consumer confidence rose five points to a reading of minus three in the second quarter. That’s better than its long-term average. And the Swiss manufacturing purchasing managers index climbed 0.8 points to a 77-month high of 60.9 in July.

Singapore’s manufacturing purchasing managers index edged up 0.1 point to 51.0, a 3-month high.

Two other purchasing manager surveys reported today were less stellar:

  • Hungary’s manufacturing PMI fell 2.7 points to a 7-month low of 54.2 in July.
  • Great Britain’s construction PMI dropped to an 11-month low of 51.9 from readings of 54.8 in June and 56.0 in May.

Quarterly New Zealand labor statistics showed a 0.1 percentage point dip in unemployment to 4.8%, a 3.1% on-year rise in jobs, the labor cost index rising 0.4% on quarter and 1.7% on year.

Construction approvals in Australia rebounded 10.9% in June but were down 2.3% from a year earlier.

Japanese consumer confidence advanced in July by 0.5 points to 43.8, a four-month high. But on-year growth in Japan’s monetary base continues to recede, falling to 15.6% in July from 18.7% in the second quarter, 21.4% in the first quarter, 25% in 2016 and 34% in 2015.

Shop price inflation in the U.K. was negative 0.4% in July, similar to readings in the prior two months.

The New York regional purchasing managers index, known as the NAPM, leaped to a 7-month high in July of 62.8 from 55.5 in June and 46.7 in May.

Copyright 2o17, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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