Euro-area inflation slows, oil's having a good end to a bad quarter, and the U.S. travel ban comes into effect. Here are some of the things people in markets are talking about today.
Consumer price growth in the euro area slowed to an annual pace of 1.3 percent in June, according to the flash estimate Eurostat published this morning. Core inflation was 1.1 percent, up from May's 0.9 percent; an encouraging sign for European Central Bank policy makers who want to see sustained inflation growth before they begin exiting from unconventional measures. The euro fell after the data was published, to trade at $1.1395 by 5:15 a.m. Eastern Time. In the U.K. the final reading of first-quarter GDP didn't alter the previous print showing 2 percent annual growth, with the Office for National Statistics saying the country's saving ratio has fallen to the lowest level on record.
President Donald Trump's travel ban came into effect yesterday evening, and immediately faced a new court challenge. While the implementation of the ban has not led to the chaos at airports that accompanied January's iteration, there remains some confusion over what constitutes a 'bona fide' tie to the United States. The bigger problem facing airports at the moment seems to be the introduction of new security measures required by the Department of Homeland Security, which will require new equipment and retraining of personnel at short notice.
Oil's sprint finish
A barrel of West Texas Intermediate for August delivery was trading at $45.33 at 5:30 a.m. as crude rose for a seventh session, its longest run of gains in six months. The picture does not look so rosy when we widen the shot as oil has lost 10 percent in the second quarter, a drop that has helped wipe $113 billion from the value of companies listed in the MSCI World Energy Sector Index. The first half of the year ends with major banks cutting their end-of-year forecasts for the commodity, and Goldman Sachs Group Inc. analysts asking themselves how they got their predictions so wrong.
Overnight, the MSCI Asia Pacific Index dropped 0.6 percent, with Japan's Topix index closing 0.8 percent lower as the region's stocks took their lead from a volatile U.S. trading session. The equity selloff is not being repeated in Europe this morning, where the Stoxx 600 Index was 0.4 percent higher at 5:40 a.m., ending the region's worst three-day decline in eight months. S&P 500 futures were also gaining.
At 8:30 a.m. this morning U.S. personal income and spending data is expected to show a decline from April's 0.4 percent reading. The core PCE deflator, the Federal Reserve's preferred measure of inflation, is due at the same time. The USDA is due to release important crop reports at noon with analysts expecting farmers to have planted more soybeans than corn for only the second time ever, with stockpiles expected to increase.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Traders who left banks for hedge funds are returning to their roots.
- Here's why quitting a job implies wage growth.
- China manufacturing rose in June amid global upturn.
- Happy Europeans may bring spark to lagging consumer stocks.
- Volatility may be waking from a coma, but it's still groggy.
- Carson Block fires back at NYSE's "un-American" jab.
- How to hedge currencies.