MORNING ROLL CALL
Dollar rises versus major peers, oil falls, gold slumps, U.S. equities slip, Europe’s markets fall back to April levels
Based on the latest economic calendar releases published during Thursday’s trading sessions, it would appear that USA economic hard data has continued its divergence versus the overall recent performance of USA equity markets. The SPX has risen by circa 20% year on year, whilst continually reaching record highs in 2017. This exponential rise is despite the economic data radiating many warning signals that economically, USA growth is spluttering. Manufacturing production fell by -0.4% in May, industrial production was flat, export prices fell -0.7% in May, whilst continuing unemployment claim numbers (at 1935k), are once again creeping up. The DJIA closed down 0.07% on the day, SPX down 0.22% and the tech stocks heavy Nasdaq, ended the day down 0.47%.
The U.S. Dollar rose versus the majority of its peers; the Dollar Spot Index rose by circa 0.6%, finally arresting three successive days of losses. USD/JPY was closing out the day up approx. 0.8% at 110.90 per dollar, just short of R2, after losing circa 0.5% on Wednesday. GBP/USD quickly slipped through S1 mid morning in the London trading session, but thereafter recovered strongly to finish the day flat and close to the daily pivot point at 1.2758, due to the UK’s central bank revealing that, although the base interest rate would remain at 0.25%, three dissenting voices in the MPC (monetary policy committee) were agitating for an increase in the short term. EUR/USD fell by circa 0.6%, to end the day at $1.1147.
WTI crude fell 0.5%, to end the day at $44.31 a barrel, the lowest level witnessed in seven months, having fallen by approx 3.8% on Wednesday, after official data revealed that U.S. gasoline supplies unexpectedly rose for a second week. Gold slumped by 1.7% on the day, to close out at circa $1,254 an ounce, representing the largest drop seen since Dec. 15th.
European markets fell sharply on Thursday; the STOXX 50 index closing down 0.71%, DAX down 0.89%, CAC down 0.50% and the UK’s FTSE down 0.74%. Trade balance data for the Eurozone missed expectations of €28.5b; coming in €17.9b for April. From the U.K. retail sales missed predictions; coming in down -1.6% in May and now registering an extremely weak 0.6% YoY growth figure. As the UK’s largest employer, retail sales are watched not only for warnings of future employment trends, but also signs of consumer spending weakness.
Economic calendar events for June 16th, all times quoted are London GMT time
09:00, currency impacted EUR. Euro-Zone Consumer Price Index (YoY) (MAY F). Eurozone CPI is forecast to fall to 1.4%, from the reading of 1.9% in April.
12:30, currency impacted USD. Housing Starts (MoM) (MAY). The 4.1% predicted would be a significant rise on the negative -2.6%, recorded in April.
12:30, currency impacted USD. Building Permits (MAY). Permits are predicted to show a rise to 1250k, from 1228k in April.
14:00, currency impacted USD. U. of Michigan Confidence (JUN P). The reading is forecast to come in at 97.0, from the 97.1 reading recorded in May.
17:00, currency impacted USD. Baker Hughes U.S. Rig Count (JUN 16). With the current collapse in the global oil price, last week’s oil rig count of 927, will be carefully monitored for any signs of change.
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