US economic data this week was all
about house prices, employment, consumer confidence and economic growth,
with the obvious link between them. Home prices, as measured by the
S&P/Case Shiller Index fell by 15.8% year on year in May, slightly
better than economist’s expectations but worse than in April. US
unemployment in July was at 5.7%, up from last month’s 5.5% rate but the
worst in more than 4 years. The latest Conference Board measure of
consumer confidence came in slightly higher than expected, which appears
more to do with “hope” than the evidence seen within the economic growth
numbers as Q208 advance GDP was put at 1.9% annualised versus the 2.3%
expected. The Dow eased by 0.4% whilst the S&P 500 managed a 0.2% gain
and the Nasdaq remained level for the week.
Euro-Zone unemployment in June was reported at 7.3% versus the 7.2%
expected and prior month reading. Economic confidence for the zone in
July was 89.5 versus June’s 94.9, whilst estimated CPI for July was
4.1%, as expected. UK house prices fell by 1.7% in July and by 8.1%
annualised the largest decline since 1991 according to the Nationwide.
Consumer credit and lending on dwellings also fell by more than expected
in June, despite M4 money supply remaining at double digits at 11.4%
year on year. The FTSE 100 index remained level over the week, whilst
the French CAC and German DAX fell by 1.4% and 0.6% respectively.
Out East, Japan’s unemployment rate inched higher to 4.1% in June as the
Countries large retail sales by 3.9% versus the 2.1% fall in May.
Elsewhere, India’s inflation rate has dipped below 12% but that didn’t
stop its Central Bank from hiking interest rates by a further 0.5% to
9%, the third rise in 3 months. The Nikkei fell by 1.8% whilst the Hang
Seng added 0.5%.
On the currency front, the $US index added 0.8% to 73.4, as the Euro and
Swiss Franc eased by 1.1% and 1.4% respectively. German 10-year bund
yields fell by 25 bps to 4.35%, whilst Japanese 10-year “JGB” yields
were lower by 6 bps, ending the week at 1.51%. US Treasury’s also firmed
as the 5 year yield collapsed by 6.4% to 3.23% whilst the 10 year yield
was lower by 3.9%, ending the week at 3.95%.
Within the Commodities Complex the crude oil price gained 2% to $125 a
barrel whilst the price of Gold gave up 2%, ending the week at $911oz.
Over July the CRB commodities index fell by 10%, its largest monthly
fall in 28 years.
Next week sees the latest machinery tool orders in Japan and more on
jobs, confidence and retail sales from the US, the UK and the EU. By far
the most watched event, however, will be interest rate decisions from
the Fed, the ECB and from the Bank of England’s MPC.
Returning to the first paragraph above, the lead Global economy, it’s
Treasury and Central Bank (in the US), remains hell bent in desperation
to try and save the “existing system” and power, regardless that history
states that it is doomed to failure. To put this “desperation” into
context, the US Treasury Debt Limit has increased by $1.650 Billion in
the 10 months since September 2007 to $10,615 Billion versus the near
two Centuries it took (1787 – 1984) for its federal debt to reach the
same $1,650 Billion.
“Debt and Lies are generally mixed together”
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