Dollar Eases a Tad In Spite of Divergent Reported Data

July 16, 2018

The dollar declined 0.6% against the peso, 0.4% versus the Swiss franc, 0.2% relative to the euro, kiwi, loonie and sterling, and 0.1% vis-a-vis the yuan and Australian dollar. With Japanese markets closed for Marine Day, the dollar remained unchanged against the yen.

Stocks in the Pacific Rim declined 0.9% in Singapore, 0.7% in Indonesia, 0.6% in China, New Zealand and India, 0.4% in Australia, South Korea and Taiwan, and 0.3% in Hong Kong. The British Ftse is also down 1.0%, but equities show little change thus far in the United States, Germany, France, Spain or Italy.

Ten-year sovereign debt yields climbed 3 basis points in the United States and two bps in Germany and the U.K..

West Texas Intermediate crude oil swooned 2.3%, falling below the key $70 per barrel level. Gold is marginally softer.

U.S. retail sales rose by an as-expected 0.5% in June and a respectable 1.9% last quarter. Year-on-year increases amounted to a robust 6.6% in June and 5.9% in the second quarter. The Empire State manufacturing index slipped to a 2-month low but printed above 20 for a third straight month in June and fourth time in the past five months.

Economic data released today in other countries were not so encouraging.

  • ¬†On-year growth in Chinese GDP slipped to a 7-quarter low in the spring of 6.7%. Chinese fixed asset investment (+6.0% in the first half of 2018) and industrial production (+6.0% on year in June) were also lower than forecast, while retail sales (+9.0% on year) rebounded from 8.5% in May but not enough to reach April’s pace.
  • Euroland’s seasonally adjusted trade surplus of EUR 16.9 billion in May was the smallest so far this year. Exports edged only 0.2% higher between April and May, while imports grew 0.9%. The non-adjusted EUR 16.5 billion trade surplus was down from EUR 19.3 billion in May 2017 because of a 0.8% drop in exports and a 0.7% on-year rise in imports.
  • Indian wholesale price inflation accelerated 1.3 percentage points to 5.77% in June, led by higher fuel costs but also complemented with accelerated inflation in manufactured goods and food as well.
  • New Zealand’s Performance of Services index dropped 4.3 points to a 6-month low reading of 52.8 in June.
  • The British Rightmove house price index dipped 0.1% on month in July and recorded a lower 1.4% 12-month rate of increase after 1.7% in June.
  • Danish producer price inflation climbed from 3.9% in may to 6.8% in June, the greatest 12-month advance since November 2011.

Presidents Trump of the U.S. and Putin of Russia held a face-to-face meeting in which Trump made nice. The U.S. president has implied that the EU presents America with its biggest competitive challenge.

Fed Chairman Powell delivers semi-annual testimony to Congress tomorrow and Wednesday.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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