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Inflation Flat in June As Slowdown Continues

16 July, 2017, 00:37 | Author: Paula Vaughn
  • An aging population and lagging population will make it hard for the US to hit Donald Trump's growth target according to Janet Yellen

"Alongside are retail sales, where we expect on-consensus gains and a solid core sales pickup", said TD securities in their week ahead report.

The continued drop in sales surprised economists, who had expected sales to inch up by 0.1% compared to the 0.3% decrease originally reported for the previous month. Even excluding for auto sales, which have declined recently, retail sales figures still posted a 0.2% drop.

Japan's Nikkei 225 added 0.1 percent to 20,118.86 and South Korea's Kospi rose 0.2 percent to 2,413.53.

The unchanged consumer price reading for June followed a 0.1 percent dip in May.

Chief economist Etsuko Yamashita said that if the US CPI would be weaker than expected, it could not only shift USD/JPY below 113 but make a new range lower than 113 instead.

Excluding food and energy prices, core producer prices also crept up by 0.1% in June after climbing by 0.3% in May.

The University of MI survey will provide its latest snapshot of consumer confidence at 10 a.m. The consumer sentiment index is expected to edge down to 95.0 in July falling to 95.1 in June.

The Labor Department released a separate report on Thursday showing a modest uptick in producer prices in the month of June.

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The annualized rate of inflation in several CPI components over the past three months showed declines of 4.9 per cent in apparel, 5.5 per cent in used cars and trucks and 4.1 per cent in professional services, said Heidi Learner, chief economist in NY for brokerage Savills Studley, a unit of Savills Plc.

Fed Chair Janet Yellen told lawmakers on Wednesday that the recent cool-off in inflation was partly the result of "a few unusual reductions in certain categories of prices" that would eventually drop out of the calculation. "We're watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot appears consistent". Cor CPI inflation was 1.7%, same as in May. "Future removals of accommodation should be done in a gradual and patient manner".

Asian shares were mixed Friday as investors awaited a raft of corporate earnings due out next week. While the greenback held steady against the euro and the franc, it fell against the pound.

The greenback reversed from an early more than a 2-week high of 0.9701 against the Swiss franc, edging down to 0.9635.

The most-active US gold futures for August delivery futures settled up $10.20, or 0.84 percent, at $1,227.50 per ounce. The Japanese yen strengthened 0.65 per cent versus the greenback at 112.53 per dollar, while the Mexican peso gained 0.48 per cent and the Canadian dollar rose 0.58 per cent versus the greenback.

EUR/USD is likely to find support at 1.1388 levels and now trading at 1.1465 levels.

Final data from the Ministry of Economy, Trade and Industry showed that Japan's industrial production declined more than estimated in May. He sees support at 95. The pair has made session high at 1.1469 and hit lows at 1.1431 levels.

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