Aside from a Drop in European Share Prices, Financial Markets in a Wait-and-See Mode
June 25, 2024
There been no net movement in the dollar overnight against the Swiss franc, sterling or Canadian, Australian and New Zealand currencies. The yen managed to stay just barely on the strong side of the 160 per dollar, and Bitcoin likewise recouped 1.5% rather than fall below the key $60,000 dollar threshold. Stock markets in Japan and Australia closed with 1.0% and 1.4% respective gains, and Nasdaq futures firmed moderately in spite of a sharp decline in Nvidia’s value. Ten-year sovereign debt yields have slipped four basis points in the U.K. and France, three bps in Germany, two bps in Spain and Italy and a basis point in the United States. Today’s U.S. data menu includes house prices, consumer confidence, the Chicago Fed National activity index, the Richmond Fed manufacturing index and weekly chain store sales, but investors are looking ahead to U.S. GDP, personal consumption and PCE price deflator figures, not to mention the all-important Biden-Trump debate and French election due soon.
Today’s most significant financial market development has involved European equities. Share prices so far are down 1.1% in Germany, 0.7% in France, 0.6% in Spain and 0.4% in Italy.
Led by business investment and net foreign demand, Spanish real GDP growth in this year’s first quarter has been revised 0.1 percentage point higher to gains of 0.8% versus 4Q 2023 and 2.5% from the first quarter of last year. Spanish growth has been ahead of the pace of Euroland’s three other largest economies, and 2.5% slightly exceeds last year’s average GDP advance of 2.3%. Spanish producer prices were also reported today and yielded a year-on-year decline of 4.6%, their 15th straight month in deflationary territory.
Japan’s April index of leading economic indicators has been revised downward to a 3-month low, but the index of coincident economic indicators was unchanged from its earlier reported four-month high and suggestive of a business cycle turn for the better. Japanese corporate service prices posted their first monthly decline in May since January and a 2-month low year-on-year advance of 2.3%.
Malaysian consumer prices rose 0.3% on month and 2.0% on year, which was the largest 12-month advance in nine months but less than half the 4.7% peak touched in August 2022.
Belgian business confidence dipped to a 2-month low of -11.1 in June but remained well above last October’s low-point of -16.8.
The Westpac-MI measure of Australian consumer sentiment rose to a 3-month high in June.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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