Independence Day 2018

July 4, 2019

Financial markets this Thursday barely moved in the absence of U.S. participation.

A few more purchasing managers surveys from June were reported.

  • The global composite PMI stayed at May’s three-year low level. The global services PMI recovered 0.3 points to 51.9 from May’s 33-month low.
  • Hong Kong’s private manufacturing PMI signaled a contractionary trend for the 15th straight time with a reading of 47.9, 1.0 point above May’s 34-month low.
  • Euroland’s construction PMI edged 0.2 points higher to 50.8, implying scant positive growth. It did so despite a 1.4-point decline in Germany’s construction PMI to an 8-month low of 50.0. France’s construction PMI rose 1.5 points to a 6-month high of 51.8, while Italy’s 50.7 reading was 0.9 points higher than May’s score and at a 2-month high.

Retail sales volume in the euro area slid 0.3% in May following a 0.1% downtick in April and a 0.1% uptick in March. May sales were just 1.3% greater than a year earlier, down from a 2.9% on-year increase just 3 months before.

Swiss CPI inflation stayed at 0.6% in June. It’s been either at that level of at 0.7% every month since December but is only half the 1.2% pace last July-August.

The National Bank of Romania Policy Board agreed once again to leave its interest rate benchmark unchanged at 2.5%. That’s been the level since a 25-basis point hike in May 2018. In reaching this decision, officials again disregarded above-target inflation. “The latest assessments indicate the outlook for the annual inflation rate to remain above the variation band of the target over the short time horizon, with some small fluctuations, and follow a trajectory compatible with that shown in the latest medium-term forecast published in the May 2019 Inflation Report.” The released statement today enumerates several uncertainties that warrant caution:

The uncertainties and risks surrounding the inflation outlook further relate to the impact of the set of fiscal and budgetary measures implemented this year, including that of the new benchmark index for loans to consumers (IRCC) on lending and on the monetary policy transmission mechanism. High uncertainties continue to be associated with the future fiscal and income policy stance, while the evolution of the current account deficit remains a matter of concern. Also important are the uncertainties about the pace of euro area and global economic growth – inter alia amid the trade war and Brexit –, as well as about the international oil price developments. Particularly relevant were considered the prospective easing of the monetary policy stance by the ECB and the Fed, and the conduct of central banks in the region.

Australian retail sales remain in a lull during May, edging up 0.1% after a 0.1% downtick in April and a 0.3% rise in March. The 12-month rate of increased eased as a result to 2.7% from 3.0% two months earlier.

South Korea’s current account surplus totaled $15.53 billion in January-May compared to $21.44 billion a year earlier.

Malaysia’s trade surplus in the first five months of 2019 was MYR 56.9 billion, a tad wider than $54.5 billion a year earlier.

Between June 2018 and June 2019, consumer prices rose 2.7% in the Netherlands but dipped 0.2% in Cyprus. That was the first on-year drop in Cyprus this year. The Dutch pace represents a 2-month high.

British new car registrations, a proxy for sales, were 4.9% lower in June than a year earlier.

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

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