A New Quarter, Old Issues, and the Data Release Drum Beats On
July 1, 2026
The optimistic rise of equities and bond prices at the end of the last quarter gave way to profit-taking as the new one kicked off.
- Equity markets in the Pacific Rim closed down 2.0% in South Korea and 0.6% in Australia and Hong Kong. Major European stock markets and futures trading of the four major U.S. equity barometers are in the red, too.
- Ten-year sovereign debt yields rose overnight by seven basis points in Italy, six bps in France, and Australia, five bps in the U.K. and Spain, four bps in Germany, and three bps in the United States, Japan, and even Switzerland.
The opened the quarter on its front foot, with overnight gains of 0.7% against the won, 0.4% versus the euro, Swissy, and Aussie dollar, 0.3% relative to the peso, and 0.2% against the loonie and sterling. The yen touched a multi-decade low of 162.84 but shows a net dip of just 0.1% due to persistent suspicions that Japan is countering selling pressure with direct forex intervention.
Gold’s price is unchanged, but silver has sunk 1.2%. Bitcoin, down 0.4%, at one point touched its lowest level since September 2024, which was when inflation in the U.S. and several other economies hit their post-spike lows.
There is much information for investors to absorb. The new Fed Chairman Kevin Warsh will be joining a panel discussion at the annual Sintra Forum in Portugal sponsored by the European Central Bank. Bank of England Governor Bailey there has already made some dovish comments against responding to elevated energy costs before seeing if that shock produces second order inflation. ECB President Lagarde will also be speaking at the conference. Being the first day of a new month, there are also many manufacturing purchasing manager survey results from last month to digest, and the Bank of Japan has published the findings of its quarterly Tankan survey of corporate conditions and expectations. Talks in Doha, Qatar between Iran and the United States are ongoing. While uncertainty towards their ultimate effectiveness, the price of WTI crude oil continued its recent descent, dropping another 0.9% so far this first day of July.
Japan’s Tankan depicts an economy that was on a better footing than expected in June. A diffusion index of conditions facing large manufacturers weighed in at +22, which is the most buoyant reading since early in 2018. Non-manufacturing also improved from the first quarter results, and the diffusion index summary for all 9,141 firms that were polled was solidly in positive territory at +18. Projected capital spending this fiscal year for all major groups were revised upward.
Japan consumer confidence, which was also reported today, went up slightly to a 4-month high but, at 33.8, remained quite depressed by historical standards and down from February’s multi-year high of 39.7.
The early estimate of consumer price inflation in the euro area last month shows all prices collectively dipping 0.1% from May levels and the year-on-year advance retreating to a 3-month low of 2.8% from 3.2% during the prior month. Energy, food, and service price inflation slowed to 3-, 59- and 2-month lows. Core CPI (excluding food and energy) of 2.4% was down from 2.6% but above April’s 2.2%.
Other price data releases this Wednesday included a 3-month high in Indonesian CPI inflation of 3.3%, a 4-month low in Croatian consumer price inflation of 4.5%, 2- and 3-month lows in Pakistani consumer and wholesale price inflation at 11.0% and 10.7% respectively, and a 3-month low in Austrian CPI inflation of 3.2%.
The twelve-month rate of increase in the British Nationwide house price index rebounded from May’s 1.7% reading to a 2-month high of 2.2% last month. Such had been at a mere 0.6% last December.
Dutch GDP growth in the first quarter has been revised slighly upward to 0.2% versus the previous quarter and 1.4% — still a 2-quarter low — when compared to a year earlier.
Swiss retail sales in May far exceeded expectations, rising 0.5% on month and 3.5% on year.
U.S. mortgage applications last week matched the prior week’s level, and the 30-year fixed mortgage rate showed very little variation through the four weeks of June posting a low of 6.57% and a high of 6.0% in the month. The Challenger estimate of U.S. job cuts in June was the fewest since December, but ADP’s estimate of the rise of private sector jobs during the month underperformed analyst expectations at just 98k.
The S&P Global purchasing managers survey of manufacturers yielded but good and bad news. The overall reading of 53.9 in June is comfortably above the 50 threshold between improving and deteriorating business conditions, but it was revised 1.8 points below the preliminary estimate and included lessening confidence in the future outlook and a concerning incidence of job cuts.
Findings in the U.S. factory PMI survey compiled at the Institute of Supply Management included a lower-than-forecast overall reading of 53.3 after 54.0 in the prior month, a closer-to-50 employment reading of 49.7, another robust orders index of 56.0 and signs of lessening though still excessive inflationary pressure with a reading of 73.0.
Euroland’s manufacturing PMI dropped to a 4-month low of 41.4. The eight euro bloc members with individualized PMI surveys ranged from a 2-month low of 55.5 in the Netherlands down to a 3-month low of 49.7 in Spain. Input and output price readings were each at a 3-month low. The data highlight resilience, all things considered, but the compilers warn that the boost from stockpiling will be fading in the months ahead.
The British manufacturing PMI of 52.5 in June was 0.6 points lower than initially estimated but still represents a 3-month high.
Japan’s PMI has been revised down a tick but at 54.8 stayed well above 50 and at a 2-month high.
Manufacturing PMI scores for India (54.2) and China (51.7) were each the lowest scores since March.
The Swiss factory PMI also slipped to a 3-month low (54.3). Sweden’s 58.3 reading was its highest in 53 months.
Manufacturing PMI readings from Eastern Europe in June include a 50-month high of 53.9 in the Czech Republic, a 17-month Russian high of 50.3, a 6-month Romanian high of 48.8, a 6-month Hungarian high of 51.5 but also an 11-month Polish low of 46.1.
The Turkish manufacturing PMI slid to a 2-month low of 47.1, while the Absa-compiled PMI for South Africa dropped 3.5 points to a 6-month low of 47.3.
Brazil’s PMI moved back above 50 to 50.8, a 2-month high, while Mexico also had a two-month high but also another sub-50 score of 48.0.
The contingent of Asian manufacturing PMI surveys yielded lower readings in South Korea, Indonesia, Vietnam and Taiwan but higher ones in Malaysia, Thailand and the Philippines.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank of Japan Tankan, Euroland consumer price inflation, Japanese consumer confidence, manufacturing PMI results
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