Week Begins With Oil Price Edging Higher and Dollar Somewhat Softer
June 29, 2026
(133) Contrary to earlier this year when the dollar benefited from Middle East tensions and uncertainty, that linkage has lately broken down. The price of West Texas Intermediate crude oil bounced back above the $70 per barrel threshold, but America’s currency has eased 0.3% against sterling, 0.2% relative to the euro, Swiss franc, kiwi and peso, and 0.1% vis-a-vis the Australian dollar and on a weighted basis.
The chief economist of the Bank of England and Governor of the Reserve Bank of Australia made hawkish comments. Huw Pill, who had been one of two members of the BOE’s monetary policy committee to dissent in favor of a rate hike at last week’s policy review, warned of a greater risk of self-sustaining inflation as a result of the U.K. exit from the European Union. Governor Bullock in Australia expressed concern about high inflation in spite of some encouraging developments like the steep fall in gasoline prices. Financial markets are now leaning toward a likelihood of three interest rate hikes by the Federal Reserve in the second half of this year rather than just two. Ten-year sovereign debt yields closed four and three basis points higher today in Japan and Australia and are up currently by a basis point in the United States, Germany, France, Italy and Spain.
The price of Bitcoin is 1% higher, while those of gold and silver are around 1% lower. Stock markets in Asia closed 1% higher today in China, Hong Kong and Taiwan but fell 1.3% in Indonesia and eked out only a 0.2% uptick in Japan. Net movement in U.S. and European equities thus far today have been unremarkable.
On the data release front, economic sentiment in Euroland rose by a greater-than-predicted 1.3 index points this month to a 3-month high. Confidence among service sector providers, retailers, consumers and in the industrial sector rose to a 3 or 2-month high. Sentiment in the construction sector and in the labor market was its most pessimistic in 21 months and two months, respectively. Inflation expectations softened a bit.
Japanese retail sales jumped 4% between March and May, resulting in a 5.3% year-on-year advance in May, which is the most in 30 months.
British mortgage approvals in May tumbled to a 29-month low and almost 15% fewer than those in April.
Belgian consumer prices slid 0.3% in June, trimming their 12-month rate of increase from a 16-month high of 4.1% in May to a 3-month low of 3.4%. Energy and food each contributed to that retreat, but 3.4% still represents the third highest inflation reading in the past fifteen months.
Spanish CPI inflation printed at 3.2% for a third straight month in June, just shy of March’s 21-month high of 3.4%.
Producer price inflation of 32.4% in Singapore in May was the most in a half century and up -1.6% this past January.
In Malaysia, producer price inflation of 7.8% last month was at a 47-month high.
The attempt by the United States and Iran to prioritize diplomacy over war is inspiring measured hope around the world. Economic sentiment in Turkey improved to a 4-month high in June. In Portugal, business sentiment and consumer confidence rose in June to 4- and 2-month highs. Finnish consumer sentiment climbed 5.2 points this month and was its least negative reading in 52 months. Slovakian consumer confidence ticked up to a 2-month high but was just single point better than the 39-month extremely depressed May reading of -28.3. Spanish business confidence rose to a 21-month high but stayed in sub-zero territory as well. In the Netherlands, however, business confidence among manufacturers crossed into positive ground and printed at a 45-month high of 1.3.
Indian industrial production in May was 5.1% above the year-earlier level. Alternatively, industrial production in Lithuania was 1.6% lower than in May 2025, the biggest such drop in nine months.
Retail sales in Spain advanced more slowly than anticipated in May, rising by 0.6% compared to April and by 1.3% on year. In neighboring Portugal, retail sales grew 0.5% on month and 3.3% compared to May 2025.
Corporate earnings in China during the first five months of this year exceeded their year-earlier level by 18.8%, a big improvement compared to the full-2025 increase of only 0.6%.
Copyright 2026, Larry Greenberg. All rights reserved.
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