Concerns Over Delta Covid Strains Weigh on European Equities

June 28, 2021

Net overnight movements in the dollar have been marginal and mixed, with dips of 0.5% versus the Turkish lira and 0.2% relative to sterling and upticks of 0.3% verus the Mexican peso, 0.2% against the Swiss franc and 0.1% vis-a-vis the Canadian, Australian and New Zealand dollars. The U.S. currency is unchanged against the yen, euro and its weighted DXY index.

Equity movements in most Asian markets and U.S. stock futures also have been negligible, but selected European markets show losses of 1.5% in Spain, 0.6% in Italy, 0.6% in the U.K., 0.5% in France and 0.2% in Germany.

Ten-year sovereign debt yields slipped back two basis points in the U.S. and U.K. and a basis point in Germany but rose a basis point in Japan. The price of gold is unchanged, and that of WTI oil is off a mere 0.1%.

The second round of French regional elections saw the center-right capture seven regions and the left get five. The big loser was the far-right National Front, which took none and altogether attracted no more than a fifth of voter support. Voter turnout was low.

A summary of views expressed at the mid-June Bank of Japan Board meeting revealed nothing significant that wasn’t known already.

For a fifth straight month, German import prices climbed at least 1.4% on month. May’s rise of 1.7% lifted the 12-month rate of increase to a 475-month high of 11.8%. Imported energy costs were 200% greater than a year earlier.

Austria’s manufacturing purchasing managers index printed at 67.0 in June, marking the third all-time high in a row in this data series that began in 1998.

Chinese industrial profits were 36.4% greater in May than a year earlier. Profits in January-May recorded an 83.4% on-year advance, down from 106.1% in January-April but far above last year’s 4.1% increase.

A 25.8% on-year increase in Thai industrial production in May was the most in 102 months.

Retail sales in May compared to the same month a year earlier posted increases of 44% in Ireland, 10.3% in Sweden, and 4.6% in Norway.

South African consumer confidence in the second quarter of 2021 was its weakest since the third quarter of 2020. Finnish consumer sentiment improved to a 40-month high in June.

Mexico ran a $340 million trade surplus in May and a similar $333 million surplus over the first five months of this year.

Hong Kong’s trade deficit of HKD 25.46 billion in May was the smallest shortfall in three months but almost twice the size of the HKD 13.7 billion deficit a year earlier.

Malaysia’s trade surplus grew from MYR 10.4 billion in May 2020 to MYR 13.7 billion last month.

The Dallas Fed monthly manufacturing index will be reported later this morning, and officials are conducting a scheduled policy review today at the Central Bank of Colombia.

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

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