Risk Aversion Subsiding for Second Straight Day

July 21, 2021

U.S. share prices have risen somewhat more than 0.5% this Wednesday after Yesterday’s strong resurgence. European stock markets have recorded even sharper gains of 1.7% in the U.K., 1.9% in France, 1.4% in Germany and 2.7% in Spain. Second-quarter corporate earnings reports are dominating financial market sentiment.

The dollar is currently trading around today’s lows but down just 0.2% on a weighted basis. Depreciation of 1.0% and 0.4% against the Canadian dollar and Swiss franc outweigh rises of 0.4% versus sterling and the yen. EUR/USD has been comparatively stable.

The price of West Texas Intermediate crude oil rebounded 1.4%, while that of gold fell 0.4%. Ten-year sovereign debt yields are higher.

U.S. existing home sales slid in May for a fourth consecutive month.

Japan’s monthly trade data for June revealed a smaller-than-forecast 3.83 billion yen surplus, but the big story is the very robust continuing rebound in both exports (up 48.6% on year) and imports (+32.7%).

Producer price inflation in South Korea settled back 0.2 percentage points to 6.4% last month.

South African consumer price inflation slid back to a 2-month low of 4.9% in June from 5.2% in May, which had been the most since late 2018.

Polish retail sales were higher than year-earlier levels for a fourth straight month, but their June gain of 13.0% was the smallest 12-month increase in that streak.

Australian retail sales fell 1.8% in July according to preliminary findings. That drop is greater than analysts anticipated.

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

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