Dollar Marking Time Ahead of G-20 Summit

June 27, 2019

There’s been little changeĀ  in the dollar, price of oil, or European equities overnight. The Group of Twenty summit in Osaka starts tomorrow. EU leaders will try again to pick the next ECB president by next week.

Ten-year sovereign debt yields dipped a basis point in the United States, Germany and Japan.

Asian stock markets rose 1.3% in Hong Kong, 1.2% in Japan, 1.1% in Taiwan, 0.8% in Singapore, and 0.7% in South Korea and Indonesia on hopes that U.S. and Chinese trade negotiators may announce a deal.

The price of Comex gold softened 0.6%.

The last estimate of U.S. real GDP growth last quarter was 3.1%, unrevised from the prior estimate and attributable to a collective boost of 2.0 percentage points from net exports, inventories, and government expenditures. On-year inflation as measured by the PCE and core PCE price deflators slipped to 1.4% and 1.7%.

Economic sentiment in the euro area weakened more than analysts were anticipating in June. The month-to-month deterioration in the industrial sector matched the largest slide in eight years. Service sector sentiment was at a 5-month low, but retail and construction recorded 3-month highs.

German consumer price inflation accelerated 0.2 percentage points to 1.6% in June.

But Spanish CPI inflation was halved to 0.4%, its lowest on-year increase in 33 months. Icelandic PPI inflation of 7.8% in May represented a 3-month low.

Spanish business sentiment fell in June back to April’s level, reversing a slight improvement in May.

Italian sentiment indices weakened in June. Consumer confidence fell to a 23-month low, and manufacturing sentiment relapsed to a 2-month low.

Consumer confidence in Portugal rose to a 4-month high in June, but Finnish consumer sentiment that month dropped to a 132-month low.

Sweden experienced a SEK 23.2 billion trade surplus during the first five months of this year, which is a turnaround from a SEK 17.5 billion deficit a year earlier.

Turning to economic news in other continents….

Chinese corporate profits in January-May were 2.3% smaller than a year earlier.

Japanese retail sales increased o.3% on month and 1.2% on year in May.

Business sentiment in South Korea dipped marginally in June but has been essentially little changed since March.

Business sentiment in New Zealand fell to a 9-month low in June.

South African producer price inflation slid 0.1 percentage point in May to 2-month low of 6.4%, and Malaysian producer prices that month were 1.5% lower than a year earlier.

Mexico recorded its fourth straight monthly trade surplus in May, equal to $1.031 billion. This lifted the 2019 year-to-date trade balance into the black.

U.S. new jobless insurance claims totaled 227k last week, the most in seven weeks.

U.S. pending home sales recovered 1.1% last month following a 1.5% slide in April.

The Kansas City Fed monthly manufacturing survey will be published shortly.

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



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