Morning Report
In Japan JUNE Housing Starts came in at 6%, beating the -3.5% forecasted. Tokyo Electric Power Company has announced that its earth quake damaged nuclear power plant profits will be off by 75% at the Japanese FISCAL YEAR end in March 2008 owing to purchases of fossil fuels to fill the void. Credit fears are also mounting in Japan as Mitsubishi UFJ and Mizuho Financial Group Inc, Japan’s two largest banks, project lower profits this year. The Nikkei 225 is currently down 40 points to 17,248; the Hang Seng is up 445 points to 23,184. The carry trade is back in swing today with JPY down across the board, losing 163 pips to GBP, and 40 pips vs. the USD at 119.46.
In the EU Euro-Zone Economic confidence came out at 111, worse than the expected 111.2. Also, the Euro-Zone business indicator came out worse than expected at 1.35 vs. the estimated 1.46. Estimated Euro-Zone CPI came in at 1.8%, lower than the 1.9% expected. However, the Euro-Zone is still expected to grow at an annualized 2.6% rate. Higher energy prices and an appreciating Euro are starting to take effect in the Euro-Zone. The DAX is currently up 146 points 7603. The EUR is mixed on the day, up ten pips vs. the USD at 1.3708 and down 53 pips vs. the GBP at 1.4835.
In the UK a GfK Consumer Confidence Survey came in worse than expected at -6 , Nationwide consumer confidence is scheduled to come out later and is also forecasted to drop in July. Recent rate hikes appear to be taking hold, as the BOE is expected to leave its benchmark unchanged at 5.75% when it meets on Thursday. The FTSE 100 is up 140 points to 6346 lead by GlaxoSmithKline. The GBP is up across the board gaining 90 pips vs. the USD at 2.0337.
In the states ICSC US Chain Store Sales increased 1.1% in July 28th week vs. .2% decrease in the week prior.
A bunch of economic data to color markets today:
8:30- Personal Income Est: 0.5% Prior: 0.4%
Personal Spending Est: 0.1% Prior: 0.5%
PCE Deflator (YoY) Est: 2.3% Prior: 2.3%
PCE Core (MoM) Est: 0.2% Prior: 0.1%
PCE Core(YoY) Est: 1.9% Prior: 1.9%
Employment Cost Index (2Q) Est: 0.9% Prior: 0.8%
9:45- Chicago Purchasing Manager Est: 58.4 Prior: 60.2
10:00- Construction Spending (MoM) Est: 0.2% Prior: 0.9%
Consumer Confidence Est: 105 Prior: 103.9
NAPM-Milwaukee Prior 66