Markets throughout Asia this morning are straddling the 0% mark – awaiting US Central banker Powell’s speech later today, which should move expectations of a Fed hike one way or the other. China’s Consumer Price Index for June, reported at the turn of the clock, maintained its 2.7% level Year-on-year, while June’s Producer Price Index fell to a flat 0, confirming Trade War clouds gathering over Chinese manufacturing. As US Commerce Sec. Wilbur Ross confirmed yesterday that he would begin approving the sale of some US components to Huawei, Teletrader this morning announced that US Pres. Trump failed to get a commitment from his Chinese counterpart to purchase US agricultural products, contradicting earlier White House announcements. Meanwhile, a trade dispute is developing between South Korea and Japan over Tokyo introduced import controls on S.Korean processors. And, in Australia, consumer confidence is down to -4.1% for July.
Indexes yesterday closed in the red, led by the DAX’s -0.85% drop. As the ECB begins its non-monetary policy meeting this morning, France reported a dazzling 2.1% increase in industrial output for May MoM, providing a momentary p10-pip spike in the Euro. Across the Channel, and amidst Britain’s Conservative Party elections, the pound continues hopping downwards, as United Kingdom Brexit Secretary Stephen Barclay argued yesterday that a no-deal Brexit would harm the Irish economy more than the UK’s. And retail sales in Italy dropped into contractionary territory in May, -1.8% in May from a positive 4.2% in March.
Markets yesterday had a muted close, except the Nasdaq, which added another half percent on Facebook’s 1,6% rise and Amazon’s 1.9. Netflix added 1.3%, Google – 1%, and Apple – 0.55%. Business optimism in the US fell back 2 points to provide an NFIB index of 103 in June, while July’s Redbook Index improved slightly MoM to -2.2%, bringing the yearly count up to 6.2%, from 5.5% in June. Fed head, Jerome Powell is scheduled to speak to congress this afternoon, as the Fed is seen to be shifting policy on White House threats. And, Canada yesterday reported a much-better-than-expected addition of 245.7K housing starts in June, while building permits in May diminished by 13% MoM.
Oil yesterday spiked momentarily at 59.10 from $58 for a single barrel of West Texas Intermediate Crude oil upon the API’s announcement last night of a 8.13 million barrel drawdown of inventories at the National Repository at Cushing Oklahoma. Gold, presently just above the 1390 mark, seems set to retest that support level once again for the 3rd time since Friday, following the US’s stellar NFP report, which motivated the dollar skywards. And, after failing yesterday to breach the 12500 mark, Bitcoin overnight shot through 13000, continuing its 4-month uptrend. Providing some crypto backwind, People’s Bank of China dep. Dir. Mu Chang Chun said that despite its problems, Facebook’s Libra “would increase confidence in (Blockchain) technology and attract investors.”
Today’s Top Economic Events
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|08:00 AM GMT – Italy
||Industrial Output (May)
|08:30 AM GMT – UK
||Manufacturing Production, Industrial Production, Index of Services, Trade Balance and Gross Domestic Product (May). RICS Housing Price Balance at 23:01.
|11:00 AM GMT – US
||MBA Mortgage Applications (Jul 5). Fed Chair Powell’s testimony and Wholesale Inventories (May) at 14:00. FOMC Minutes at 18:00.
|14:00 PM GMT – Canada
||Bank of Canada Monetary Policy & Interest Rate Statement
|14:30 PM GMT – OIL
||EIA Crude Oil Stocks Change (Jul 5)
|22:45 PM GMT – NZ
||Credit Card Spending and Electronic Card Retail Sales (Jun)
|23:50 PM GMT – Japan
||Foreign Bond & Stocks Investment (Jul 5). Trade Balance at 23:50.
|00:00 AM GMT (+1) – Australia
||Consumer Inflation Expectations (Jul), and Investment Lending for Homes (May) at 01:30
|02:00 – AM GMT (+1) – China
||Money Supply and New Loans