The biggest news of the session was the inflation data from Tokyo (OK, the other big news is at the bottom of the page where it belongs). Tokyo’s CPI accelerated in May. Country-level CPI data will arrive in about three weeks and if it follows (Tokyo’s data is generally not too different from the national numbers), it will keep the Bank of Japan on track to consider another hike in rate in 2017. the coming months. Note that the BoJ does not seem in too much of a hurry for the next increase.
Other data from Japan was mixed. Industrial production fell in April, a surprise. Retail sales grew strongly.
We received yen-friendly comments today from Japanese Finance Minister Suzuki, who gave the yen a small boost.
The other main data of interest were the China PMIs. These were the official PMIs from the National Bureau of Statistics (NBS). Although the services PMI index fell slightly, it remained expanding. The manufacturing PMI, on the other hand, performed very poorly, falling to its lowest level in three months and returning to contraction at 49.5. It’s certainly been a bumpy recovery in China. Stay tuned for Caixin PMIs from private surveys to follow next week, manufacturing on Monday and services on Wednesday.
Major FX was mixed. The dollar strengthened against the EUR and GBP, while the NZD/USD rose. The AUD and CAD remained relatively stable.
USD/JPY fell to a low around 156.60 after the data and Suzuki, but has since recovered towards the middle of its session range around 156.78, as I post.
Remember, and be prepared, that US inflation data is still to come:
And before that, something interesting:
***
There will be no escaping the American election saga in the months to come. Today’s surprise was the conviction of Donald Trump during his criminal trial in New York. In summary:
- Trump is the first US president to be convicted of a crime
- He was convicted on all 34 counts of falsifying business records to commit election fraud.
- The jurors were unanimous on all points
- The case centered on secret payments to porn actress Stormy Daniels.
- Sentencing will take place on July 11
- The potential sentence ranges from nothing to 4 years in prison
These are all facts, if you want to speculate on what lies ahead for us, largely uninformed and partisan, there are many. Or you could just have a nice weekend.
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