•
US retail sales beat estimates; market buys the
rumor, sells the fact
– USD rallied
ahead of the number, jumped when it came out, then quickly fell back
– Nonetheless
remains above yesterday’s levels this morning
•
Focus now turns to next week’s FOMC meeting
– What kind
of guidance will they give on future rate hikes?
– How will
the “dot plot” change? In March the weighted average estimate for Fed funds at
year-end was 0.77% = 2 rate hikes (possibly Sep & Dec, when there are press
conferences scheduled). Any change?
•
Greek situation goes from bad to worse
– IMF
technical team leaves Brussels because all the talks are now political
– German
newspapers report growing opposition to 3rd bailout no matter what
– Market is
not yet discounting failure in the talks. Greek
stocks up 8% yesterday.
•
Oil prices fall slightly on reports of record
OPEC output
– Saudi,
Iraq, UAE all pumping record amounts; so is US apparently
– I expect
oil to fall, bringing CAD and NOK down with it
•
Today:
– Eurozone: Industrial
production for April expected to rise = EUR-positive
– UK:
Speech by hawkish BoE MPC member McCafferty to be published.
– US: PPI for
May expected to rise mom; preliminary U of M consumer sentment index for June
expected higher = USD-positive
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