MORNING BRIEFING: The US Dollar under pressure, Russia will reduce its share of US bonds in exchange reserves.
Whats new?
Russia: Reduces share of US bonds in its exchange reserves.
United Kingdom: An unexpected rise in industrial production in April.
United Kingdom: The economy has resumed growth in April / NIESR.
United States: Trade deficit to $ 29.16B.
United States: Budget deficit of $ 190B in May.
Oil: Reaches 7 month high in New York, sharp drop in oil stocks.
United States: Birth of the “New Chrysler” is official.
Today:
10h00 Euro zone: ECB monthly bulletin.
14h30 United States: Retail Sales May, exp 0.50%, previous -0.40%.
14h30 United States: Retail Sales excluding autos May, exp 0.20%, previous -0.50%.
14h30 United States: Initial Jobless Claims, exp 615’000, previous 621’000.
14h30 United States: Continuing Claims, exp 6.77M, previous 6.735M
14h30 Canada: Capacity Utilization Q1, exp 71.50%, previous 74.70%.
16h00 United States: Business Inventories April, exp -1.00%, previous -1.00%
Overnight Rates and Indices:
EURUSD: 1.4061 1.3965.
USDCHF: 1.0823 1.0754.
GBPUSD: 1.6437 1.6341.
EURJPY: 137.67 137.13.
USDJPY: 98.30 97.74.
DowJones: 8’739 -0.27%.
NASDAQ: 1853 -0.38%.
S&P 500: 939 -0.35%.
Nikkei: 9783 -0.83%.
Gold: $958.20
Comments:
More bearish news for the dollar; Russia will reduce its share of US bonds in its exchange reserves in favor of bonds issued by the International Monetary Fund. The Russian reserves, which total $404.2B, currently make up 30% of Treasuries.
In the United States, the trade deficit widened to $ 29.16B in April, partly because of falling exports to their lowest level since July 2006. Yields in the United States are also increasing, which should weigh on household consumption and business investment. The return on Treasury bonds is closer to 4%, the highest since October 2008. The rise in raw materials, especially oil at its highest since in 8 months, is seen as a sign of improving global economic conditions. However, it could fuel inflation in the United States, forcing the Federal Reserve to raise its rates. The “Beige Book” released yesterday confirms that the state of the US economy was more stable than during May, with some scattered signs of an easing of the recession.
Today, the monthly report from the ECB at 10h00 CET and retail sales from the United States at 14h30 CET are the two points of attraction. The levels to watch in the medium term are EURUSD 1.3900 and 1.4170.
Good Day