Several Equity Markets in Unchartered Waters; Today’s Data Front Features CPI and Retail Sales

August 11, 2021

The weighted dollar index touched an 18-week high overnight but is currently down 0.1% on balance. The dollar is also 0.1% lower against the euro, sterling and Swissie but unchanged relative to the yen and loonie. The dollar has dropped 0.6% against the Mexican peso but shows a 0.7% rise versus Turkey’s lira.

In early intra-day play, both the S&P and Dow rose to record highs. The Japanese Nikkei closed 0.7% higher, and key European exchanges at this writing are 0.4% to 1.0% stronger.

Ten-year sovereign debt yields are comparatively steady. WTI oil is down 1.0%, while the price of gold has risen 0.5%.

In U.S. political news, the Senate passed a $1.0 trillion bipartisan infrastructure bill and moved forward on a much larger partisan package to address climate change and fix problems in health care and education. New York State Governor Andrew Cuomo resigned.

U.S. consumer prices rose 0.5% on month in July, down from June’s 0.9% jump and by the smallest amount since February’s 0.4% increase. Core consumer prices climbed just 0.3%, less than half as much as in the prior three months. The data support but don’t totally prove the Fed’s belief that the recent spike in inflation will be mostly transitory.

German consumer prices, on the other hand, climbed by a very sharp 0.9% on month in July and accelerated to a 331-month year-on-year high of 3.8% from 2.3% in June.

Italian consumer prices rose 0.5% on month, most since January, and were 1.9% above their July 2020 level, which is the biggest year-on-year rise in 51 months.

Portuguese consumer prices dipped 0.3% last month, but their 12-month rate of increase rebounded from 0.5% in June to a 3-year high of 1.5%.

Romanian CPI inflation extended to a 34-month high of 4.95% in July.

In Covid-hit Indonesia, retail sales plunged 12.8% in June, which slashed the 12-month increase to 2.5% from 14.7% in May and 15.6% in April.

Malaysian retail sales, which had crested at a 12-month increase in April of 56.4%, posted their first on-year drop (2.9%) since February in June.

An unexpected 1.7% drop of Brazilian retail sales in June depressed their year-on-year increase to 6.3% from 16.0% in May and 23.7% in April.

Business confidence in South Africa slid according to the Sacci measure to a 9-month low in July.

Mexican industrial production fell 0.5% monthly in June, its worst performance of the first half of 2021.

Year-on-year real GDP growth in Singapore in 2Q 2021 has been revised upward by half a percentage point to 14.7%. Note that the base for this comparison was a 15.3% on-year plunge in the second quarter of 2020. Singapore also experienced a record SGD 25.64 billion current account surplus last quarter.

Australian consumer confidence according to the Westpac monthly estimate plunged 4.4% this month to a one-year low.

A number of Japanese indicators reported today showed a 4-month high during July in the economy watchers index, a 93.4% on-year advanceĀ  in machine tool orders (smallest jump in four months) in July and M3 money growth of 5.2% last month, down from 7.6% in 2Q and 9.5% in 1Q.

Chinese on-year M2 money growth slowed 0.3 percentage points to a 2-month low of 8.3% in July and also undershot analyst expectations. A 1.08 trillion yuan rise in new bank loans was the smallest increase since last October.

South Korea’s 3.3% jobless rate in July was the lowest since August 2020.

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


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