Owen Thomas
"I'm very worried about China; it's a massive credit bomb that needs to be defused"; the words of Michael Ingram, Market Strategist at BGC Partners. His comments come as latest data shows manufacturing in China is still shrinking, albeit at a slightly slower rate.
Article / 28 June 2013 at 5:31 GMT

3 Numbers to Watch: DE Retail, US Chicago ISM, U. Mich. Sentiment

Juhani Huopainen Juhani Huopainen
Blogger / MoreLiver's Daily

Today’s data releases are not terribly important ones, but there are many of them. Tonnes of data came out of Japan last night and notably the inflation numbers are still not reacting to ‘Abenomics’, but at least the industrial production and PMI surprised positively. This could translate into a positive tone for the European morning session, as the data did not kill the idea that aggressive monetary policy can help an economy.

A European Union leaders’ two-day summit ends today. EU finance ministers hammered out the details by early Thursday morning, see FT’s blog article for background information. Today we have a total of four speakers from the Federal Reserve: Stein 12:00 GMT, Lacker 13:15 GMT, Pianalto 16:00 GMT, Williams 19:30 GMT. After Bernanke’s tapering-Federal Open Market Committee meeting last week, all Fed speeches have been quite accommodating, as this chart from Zero Hedge shows.

Germany May Retail Sales (06:00 GMT). A monthly fall of 0.3 percent in May is expected, after a fall of 0.4 percent in April. Retail sales have not been exactly ballooning during the past two years, and it is hoped that higher wages, low interest rates and a lull in the euro crisis will translate into happier consumers.

 DE Retail Trade

US June Chicago ISM (13:45). The regional purchasing managers' index is expected to decrease slightly to 55, from 58.7 in May. May’s reading was a positive surprise, especially as the April index dipped below the 50-level, meaning contraction, to a multi-year low. The index is sawing in a lower range than 2010-2011 – and this lower range has now twice flirted with the 50-level in the past twelve months. The number is released three minutes earlier to subscribers. See the press release here.

 US Chicago ISM

US Thomson Reuters / U. Michigan Survey of Consumers (13:55 GMT). The final reading is expected to be 83 for June, down slightly from 84.5 in May, but almost unchanged from the flash estimate of 82.7 on June-14.  After the strong consumer confidence report last Tuesday, it is hoped that today’s data release confirms the high expectations. For a longer-term chart and discussion on sentiment, see my earlier post. Lower stock prices and higher mortgage rates could begin to have an effect on confidence, but on the other hand cheaper gasoline and higher house prices are helping. As the chart shows, there is plenty of room for lower index values as well, without changing the big picture. Actually, the chart is telling a similar story for the Chicago ISM as well. Would a good scenario be further economic weakness, followed by new measures on the fiscal and monetary fronts, leading to a new bounce?


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