Equities and Sovereign Debt Yields Up After U.S. Tariff Hikes on Mexico Averted
June 10, 2019
A deal was reached between U.S. and Mexican officials in which Mexican troops will be deployed to contain migrants crossing into the U.S. and President Trump withdrew his threat of escalating tariffs. The success of this deal will be reassessed in 3 months.
In market action overnight equities, the price of oil and 10-year sovereign debt yields rose in response. The price of gold has fallen somewhat more than 1.0%, but changes in the dollar have been small.
An agreement to merge United Technologies and Raytheon was announced.
China’s trade surplus snapped back to $41.65 billion in May after shrinking sharply to $13.84 billion in April.
Japanese GDP growth last quarter was revised slightly upward to 2.2% at a seasonally adjusted annualized rate. Growth was powered by a 17.2% plunge in imports and business investment. Consumption dipped 0.2%. The GDP price deflator was 0.1% higher than a year earlier, and areal GDP recorded on-year growth of 0.9%.
Japan’s current account swung to a JPY 1.7 trillion deficit in April from a JPY 1.9 trillion surplus a year earlier.
Japan’s economy watchers index posted further deterioration in May both in the current and outlook measurements.
British monthly GDP sank 0.4% in April and was just 0.3% higher from a year earlier in February-April.
Britain’s goods and services trade deficit contracted sharply from GBP 6.15 billion in March to GBP 2.74 billion in April.
Industrial production in the U.K. dropped 2.7% on month in May and by 1.0% from a year earlier. This was a considerably worse outcome than forecast. British construction output also weakened, dropping 0.4% from the month before and recording a smaller 2.4% year-on-year advance.
Italian industrial production fell 0.7% on month and 1.5% on year in April.
Canadian housing starts fell 31K to 202.5K in May.
And Indonesian CPI inflation slowed half a percentage point to 3.32% in May, due mainly to lessening energy price pressure.
Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British industrial production and trade, China trade balance, Japanese current account, Mexican trade deal