Dollar Starting Week on a Rising Note, whereas Share Prices and Sovereign Debt Yields Move Lower

July 12, 2021

The dollar climbed 0.6% against the Mexican peso and New Zealand dollar, 0.5% versus the Australian dollar, 0.4% vis-a-vis the loonie, 0.3% relative to sterling an 0.1% against the yen but is steady versus the euro and yuan.

Stocks in the Pacific Rim had closed up 2.3% in Japan, 0.9% in Taiwan, 0.8% in Australia and South Korea, 0.7% in China, and 0.6% in Hong Kong. In Europe, by contrast, share prices have dropped so far 0.8% in the U.K., 0.7% in Spain, 0.4% in France and 0.2% in Germany. U.S. stock futures also have faltered.

Ten-year sovereign debt yields have slipped two basis points in the U.S., U.K., France and Spain and by a basis point in Japan and Germany.

Among commodity prices, WTI oil fell back 1.7%, and gold is down 0.6%.

A monetary policy review in the Philippines resulted in the record low 2.0% overnight repo rate being left unchanged. In 2020, such had been halved in five increments, most recently November when a 25-basis point cut was authorized. Filipino CPI inflation slowed in June by 0.4 percentage points to a half-year low of 4.1%, just marginally above the target range ceiling.

ECB President Lagarde signaled a likely change in the wording of forward guidance at next week’s scheduled policy meeting but reassured that policy will remain quite expansive.

Portuguese CPI inflation which had doubled to 1.2% in May fell back all the way to 0.5% in June, a 3-month low.

Serbian CPI inflation slowed 0.3 percentage points to a 2-month low of 3.3% in June.

Danish CPI inflation last month stayed unchanged from May’s 101-month high of 1.7%.

German wholesale prices increased more than 1.0% in each month of the first half of 2021 including 1.5% in June, which lifted the 12-month rate of increase in the index to a 356-month high of 10.7%. Higher oil prices were the main inflationary force.

Japanese domestic producer price inflation receded 0.1 percentage point in June to 5.0%, but import price inflation continued to crest, rising to 28.0%.

A 7.8% monthly rise in Japanese core domestic machinery orders in May was three times greater than forecast and resulted in a 12.2% advanced from the level in May 2020. On-year growth in machine tool orders of 96.6% in June was smaller than the 12-month increases of 140.7% in May and 120.8% in April.

Malaysian retail sales in May fell 2.2% on month but rose 17.3% on year. Industrial production was 26% greater than Malaysia’s year-earlier level.

Indonesian retail sales increased 3.2% on month and 14.7% on year in May

Mexican industrial production posted a second straight monthly decline in May, this time of 2.6%, but output was 36.4% greater than a year earlier.

Factory output in South Africa rose 35.3% between May 2020 and May 2021.

Turkish unemployment settled back 0.6 percentage points from April’s 9-month high to 13.2% in May.

Having soared 16% in March, Australian building permits dropped 5.7% decline in April and by a further 7.1% in May.

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

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