A Quiet Uneventful Monday So Far

June 17, 2019

The third week of June is getting off to a slow start in world financial markets. Trade tensions between the United States remain high amid uncertainty over whether Trump and Xi meet at the G20 meeting later in the month. Investors are also paying close attention to central bank activities, as the Fed, Bank of Japan, and Bank of England are a few of the many monetary policies that are scheduled for review this week. Today is also the 47th anniversary of the Watergate break-in. Speaking of political hubris, President Trump yesterday tweeted, “If anyone but me takes over in 2020 … there will be a Market Crash the likes of which has not been seen before!”

Most equity markets in fact saw minimal excitement overnight, closing unchanged in Japan and Hong Kong, up 0.2% in China and South Korea and 0.1% in Taiwan, but down 0.5% in Singapore, 0.4% in Australia, and 0.8% in New Zealand. In Europe, stocks are currently flat in Switzerland, up 0.2% in France and 0.1% in Germany and Italy. The British Ftse has edged down 0.1%.

The dollar is unchanged against the yuan, sterling, loonie and Swiss franc. The U.S. currency shows upticks of 0.1% against the yen, Aussie dollar and yuan but a 0.2% dip relative to the kiwi.

The 10-year U.S. Treasury yield has risen 3 basis points, and its German and British counterparts are 2 and 1 basis points firmer, respectively. The 10-year Japanese JGB yield, however, remained pinned at minus 0.13%.

There’s been no meaningful data reports to stir the market.

Hourly labor costs in the euro area posted a 2.4% year-on-year increase last quarter, which is between  2.3% in the final quarter of 2018 and 2.3% last summer.

Producer price inflation in May decelerated half a percentage point to a 2-month low of 3.8% in the Czech Republic and by 1.6 percentage points to minus 0.4% in Denmark. Danish PPI inflation had crested at 7.3% last August.

The three-month average unemployment rate in Turkey of 14.1% in February-April was four percentage points higher than a year earlier. In seasonally adjusted terms, the jobless rate edged 0.1 percentage point higher to 13.7%.

Norway’s NOK 91.4 billion trade surplus in January-May was 13.9% narrower than a year earlier.

Singapore’s SGD 3.963 billion trade surplus in May was 44% wider than April’s surplus and the biggest since SGD 5.2 billion in February.

The Rightmove measure of British house price inflation continued to flat-line in June, with zero on-year change versus +0.1% in May and minus 0.1% in April.

New Zealand’s service sector purchasing managers index rose 1.6 points to a 3-month high in May of 53.6.

From the U.S., the Empire State manufacturing index and the National Association of Home Builders monthly housing market index will be reported later today. Canadian existing home sales and Brazil’s index of leading economic indicators are also due. Street protests continued overnight in Hong Kong.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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