Robust Sentiment Indices

June 25, 2021

The dollar posted fractional losses overnight, dipping 0.1% on balance against the euro, yen, loonie, Swiss franc, Aussie dollar, New Zealand dollar, and on a DXY weighted basis. The dollar also fell 0.3% versus the Chinese yuan, Mexican peso, and Turkish lira.

Equity markets advanced 1.4% in Hong Kong, 1.2% in China and 0.7% in Japan but are narrowly mixed in Europe and U.S. futures trading. Ten-year sovereign debt yields are up two and one basis points in Germany and the U.K., down a basis point in Japan and flat in U.S. futures trading.

The price of West Texas Intermediate oil slipped 0.4% overnight, while that of gold firmed 0.3%.

German consumer confidence improved sharply to an 11-month high, and British consumer sentiment matched May’s 14-month high. In Italy, consumer confidence strengthened 4.5 index points to a 32-month high.

Business confidence in South Korea recorded a 122-month high in June.

Italian manufacturing sector confidence improved to a 247-month high in June.

Belgian business confidence advanced to its best level since at least 1980 in June, having only climbed above zero two months earlier.

Britain’s monthly distributive trades survey index advanced six index points in June to a 34-month high.

Despite a 1.0% monthly increase, year-on-year growth in Danish retail sales slowed to a 3-month low of 6.4% in May from 9.7% in April and 24.3% in March.

In Singapore, industrial production jumped 7.2% in May, lifting the 12-month rate of increase to a 124-month high of 30.0%.

The number of French unemployed workers declined by 133.7k in May and by 23.1k in the same month a year earlier.

Among released price data this Friday, Spanish PPI inflation accelerated 3.5 percentage points to a 450-month high of 15.3% in May, thanks to a 37.6% year-on-year advance in energy.

But Malaysian CPI inflation settled back to a 2-month low of 4.4% in May from 4.7% in the prior month, and core Tokyo CPI inflation rose 0.2 percentage points in June to zero percent.

On-year growth in Euroland M3 money slowed further to 8.4% in May from 9.2% in April, 10.0% in March and 12.3% in February. Credit to the private sector slowed to 3.5% last month from 4.0% in April and 5.0% in February.

The Bank of Mexico’s benchmark interest rate has been raised by 25 basis points, reversing a cut of that same size engineered in February and underscoring the rapid brightening of global economic conditions since the first months of this year.

Investors now await the release of monthly U.S.  personal income and spending. The PCE price deflator will draw particular interest from investors. The U. Michigan/Reuters consumer sentiment index also will be reported today. Meanwhile, markets will be assessing yesterday’s news of a limited but bipartisan infrastructure agreement and its implications for other elements of President Biden’s agenda. The cause of the sudden collapse of a condo in south Florida that looks like an explosion remains unknown.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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