Turkey and Iran in the News

June 24, 2019

The Turkish ruling party’s candidate was soundly defeated in Istanbul’s re-run mayoral election. This blow to President Erdogen’s autocratic regime sent the Turkish lira up 0.8% against the dollar.

Iranian authorities are claiming that U.S. cyber attack against Iran’s rocket launch system were unsuccessful. Fears of a U.S.-Iran war persist. The price of WTI crude oil climbed 0.8% overnight. Comex gold also advanced 0.8%, securing a beachhead above $1,400 per ounce.

Ten-year sovereign debt yields are lower in Europe, including drops of 4 basis points in the U.K. and 3 basis points in Germany. The ten-year U.S. Treasury yield slid two bps, while its Japanese counterpart remains unchanged at -0.16%.

The dollar opened this last week of the second quarter on a down note, dipping 0.3% against the Australian and New Zealand dollars, 0.2% relative to the euro, Swiss franc, loonie, and yuan, and 0.1% versus the Japanese yen and Mexican peso. Sterling weakened in lockstep with the dollar.

Share prices firmed 0.3% in Hong Kong, 0.2% in China and 0.1% in Japan but fell 0.4% in Indonesia, 0.3% in Singapore and 0.2% in Taiwan and India. Moreover, stocks in Europe are so far down 0.5% in Germany and Italy, 0.4% in Spain, and 0.2% in France.

Japan’s April index of leading economic indicators was revised up 0.4 index points, but the trend for the index of coincident economic index was designated “worsening” for a second straight month. On-year increases in Japanese supermarket sales of 0.4% in March and 0.7% in May sandwiched a 1.0% decline recorded in the year through April.

IFO Institute’s German business climate index fell another half point in June to a 55-month low of 97.4 on further deterioration in the outlook for manufacturing. IFO officials said the data imply that Germany’s economy is headed for the doldrums.

Reserve Bank of Australia Governor Lowe express some doubt about the potential effectiveness of additional monetary stimulus.

A 0.5% quarterly rise of Dutch GDP in 1Q was confirmed. That depressed on-year growth to 1.7%, lowest since the final quarter of 2015.

Czech consumer confidence this month matched May’s 3-month high, but business sentiment in that economy fell to a 50-month low.

Polish retail sales fell 3.0% on month but rose 7.3% on year in May.

Finnish producer price inflation was halved in May to 0.9%, which is also down from 6.2% last August.

Singapore CPI inflation edged up in May by 0.1 percentage point to 0.9%, which also was three times greater than the on-year increase last August.

Indonesia posted a $208 million trade surplus in May, and the year-to-date deficit of $2.14 billion was 25% narrower than a year earlier.

The monthly Dallas Fed manufacturing index and the Chicago Fed National Activity Index will be published today. China’s index of leading economic indicators arrives as well.

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

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