Calmer Waters
June 20, 2018
Share prices recovered 1.2% in Japan and Australia, 1.0% in South Korea, 0.7% in India, 0.4% in Hong Kong and 0.3% in China. U.S. and European equities have rebounded more moderately. The spin on a possible trade war is that the harsh rhetoric from officials in the U.S. and China is just threat to secure a more advantageous deal.
Ten-year sovereign debt yields didn’t changed today in the U.S., Germany, France, Spain, U.K. or Japan.
Ahead of a meeting of oil ministers, WTI oil rose 1.4%. Gold has barely moved.
The dollar is unchanged today against the yen, euro and Swiss franc. The greenback has edged up 0.1% versus the loonie and Aussie dollar but dipped 0.1% relative to sterling. The kiwi fell 0.5%, while the peso rose 0.6%.
By a vote of 5-1, officials at the Bank of Thailand left the one-day repo rate at 1.5%, its level since a 25-basis point reduction in April 2015, which culminated 200 basis points of easing since November 2011. There hasn’t been a rate hike in Thailand since August 2011. Inflation is still below the 1-4% target midpoint. Officials upgraded projected GDP growth slightly due to a better assessment of exports.
Brazilian monetary officials also are reviewing policy today.
The U.S. current account deficit widened to $124.1 billion last quarter from a downwardly revised $116.2 billion in the final quarter of 2017 and $121.8 billion in the initial quarter of 2017. As a percent of U.S. GDP, the current account deficit equaled 2.5%, up from 2.4%.
German PPI inflation increased 0.7 percentage points to a 7-month high of 2.7% in May. Energy advanced 5.5% on year, while all other producer prices went up 1.7%.
The CBI monthly survey of British industrial trends revealed a sharp 16-point rebound in the orders component to a 5-month high in June of +13. Such an improvement had not been expected.
New Zealand posted a 182 million NZ dollar current account surplus in the first quarter of 2018, but the deficit over the past four reported quarters equaled a large 2.8% of GDP. New Zealand consumer confidence fell 2.3% last quarter.
Swedish consumer confidence recorded a seventh consecutive month-to-month deterioration in June, hitting a 21-month low of 96.8 compared to 108.2 last November. But overall economic sentiment in Sweden recovered marginally from a 14-month low reached in May.
Belgian consumer confidence printed -3 in the red for June after declining to zero in May from +4 in january
The Portuguese and Greek current account deficits in April equaled EUR 315 million and EUR 1.34 billion, respectively.
Over the 12 months to May, consumer prices rose 4.4% in South Africa and 1.8% in Malaysia.
U.S. existing home sales dipped 0.4% in May and were 3.0% lower than a year earlier. Mortgage applications jumped 5.1% last week, however.
Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German PPI, U.K. industrial trends survey, U.S. current account