Awaiting U.S. Data
July 16, 2024
The data release menu from Europe and Asia today has been comparatively sparse, but U.S. retail sales and import price figures as well as Canadian consumer prices are due momentarily.
Meantime, the dollar has hardly changed position, dipping 0.1% against the euro and Swiss franc but firming 0.2% versus the yen. Share prices fell 1.6% in Hong Kong but closed up 0.5% in Taiwan and 0.2% in Japan. Major European share prices are down 0.5-1.0% so far, while key U.S. stock market futures have extended Monday’s advances marginally in pre-open trading.
The European Central Bank’s meeting Thursday is widely expected to end without a further interest rate cut, but speculation persists about an initial Fed funds target cut in September. Chairman Powell’s remarks yesterday included nothing to dissuade that scenario. Accordingly, ten-year sovereign debt yields fell overnight by six basis points in Germany, five bps in the United States and Great Britain, four bps in France and Spain and three basis points in Italy.
Bitcoin enthusiasm initially swelled from the revelation of Donald Trump’s running mate. Ohio Senator J.D. Vance has been a huge proponent of crypto currencies. Profit-taking overnight has trimmed the price of bitcoin by over 1%, but such nonetheless is sporting a big 12.8% jump from last Friday’s low.
A Trump victory with long coat-tails in November is perceived highly likely in November. Republican Party fondness for fossil fuel production with a motto of drill baby drill depressed the price of oil overnight by 1.8%, while gold firmed 0.6%.
U.S. retail sales flat-lined in June, matching analyst forecast, due to weakness in sales at gas stations (down 3%) and auto dealerships (-2.3%). For the second quarter as a whole, retail sales rose 0.6% on quarter and 2.5% on year.
U.S. import prices in June also were unchanged, and this lack of increase did surprise markets, where a consensus rise of 0.2% had pre-existed. In May, import prices had dropped 0.2%, and June’s level was just 1.6% higher than in mid-2023. Imported fuel costs fell 1.0%, while all other import prices were 0.2% above May’s level.
In other data news out today, the ZEW Institute’s monthly measure of investor sentiment regarding Germany’s economic outlook suffered its first month-to-month deterioration in a year, falling to a 4-month low reading of 41.8 this month from 47.5 in June. Concern about the rightward shift in European politics did not prevent a further lessening of pessimism regarding current economic conditions in Germany, nor the whole euro area for that matter. Expected inflation, whose trend remains downward, was less pronounced this month than in June.
The French EUR 7.5 billion current account deficit in the first five months of this year was 55% narrower than a year earlier and quite manageable at just 0.4% of GDP.
While Gaza’s economy continues to pay a horrific price for the attack by Hamas on Israel last October, Israeli GDP rebounded at a 14.4% annualized pace in the first quarter of 2024 after contracting by 21.6% in 4Q 2023.
Japan’s tertiary index slipped 0.4% in May, trimming the 12-month rate of increase for this measure of service sector activity back to 1.1% from 1.6% in April and after a 1.0% on-year advance in the first quarter.
Euroland’s seasonally adjusted trade surplus contracted rather sharply from EUR 18.5 billion in April to 12.3 billion euros in May.
Overall Canadian consumer price inflation in June unexpectedly dipped 0.2 percentage points back to April’s 35-month low of 2.7%, less than half the 8.1% cyclical peak of 8.1% in mid-2022. But analysts also didn’t anticipate a 0.1 percentage point uptick in core consumer price inflation to 1.9%. Core had been as low as 1.6% in April.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euroland investor sentiment, Euroland trade balance, J.D. Vance, U.S. import prices and retail sales
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