Today's May US PPI report is expected at +0.4% overall and +0.2% core, following April's report of +0.9% overall and +0.1% core. The core PPI is currently in good shape at +1.5% y/y, which is well below the generally-accepted 2% ceiling for inflation. However, the Fed pays much more attention to the CPI and PCE deflator statistics than producer prices. Tomorrows core CPI is expected to be unchanged from April at +2.3% on a year-on-year basis, which is above the generally-accepted 2% inflation ceiling and only 0.1 point below the 3-1/2 year high of +2.4% posted in February 2005.
Today's May US retail sales report is expected to be unchanged, with weakness stemming from the drop in May auto sales to 16.1 mln units from 16.7 mln units in April (both of which are below the 12-month trend average of 16.9 mln units). However, excluding auto sales, May retail sales are expected to be fairly strong at +0.5%, following April's +0.7% increase. Retail sales continue to hold up well despite all the problems through May, but the additional bad news in June (sharply lower stock prices) may finally convince consumers to cut back on their spending.
Sep 10-year T-note prices this morning are trading +7.5 ticks as the global stock market sell-off worsens, thus producing some flight-to-quality buying in US Treasury securities. T-notes yesterday closed little changed, despite the sharp sell-off in US stocks due to hawkish comments from Cleveland Fed President Pianalto and nervousness ahead of today's PPI report and tomorrow's CPI report.
The dollar this morning is trading is trading slightly higher. The dollar/yen is up +0.05 yen and the euro/dollar is trading -0.08 cents. The dollar yesterday edged to a new 1-month high but closed just slightly higher. The dollar was supported by another bad day in the global stock markets and by ongoing hawkish Fed comments, but was undercut by the record May Chinese trade surplus which was bullish for the Asian currencies.
July crude oil prices this morning are trading -68 cents as the market worries about the possibility that the recent plunge in global stock markets may presage weaker global economic growth and by extension lower demand for petroleum products. In addition, tomorrow's weekly DOE report is expected to show a +1.4 mln barrel increase in gasoline inventories. July crude oil prices yesterday fell sharply by $1.27 per barrel as the market focused on near 8-year highs in crude oil inventories and rising gasoline inventories, and shook off comments by Iranian officials that their rights to nuclear research are not negotiable. The energy market is watching Tropical Storm Alberto but the storm is not expected to cause any major production disruptions in the Gulf of Mexico. [link=http://www.oxfordfutures.com/ newwindow]Commodity Broker[/link]
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Today's May US retail sales report is expected to be unchanged, with weakness stemming from the drop in May auto sales to 16.1 mln units from 16.7 mln units in April (both of which are below the 12-month trend average of 16.9 mln units). However, excluding auto sales, May retail sales are expected to be fairly strong at +0.5%, following April's +0.7% increase. Retail sales continue to hold up well despite all the problems through May, but the additional bad news in June (sharply lower stock prices) may finally convince consumers to cut back on their spending.
Sep 10-year T-note prices this morning are trading +7.5 ticks as the global stock market sell-off worsens, thus producing some flight-to-quality buying in US Treasury securities. T-notes yesterday closed little changed, despite the sharp sell-off in US stocks due to hawkish comments from Cleveland Fed President Pianalto and nervousness ahead of today's PPI report and tomorrow's CPI report.
The dollar this morning is trading is trading slightly higher. The dollar/yen is up +0.05 yen and the euro/dollar is trading -0.08 cents. The dollar yesterday edged to a new 1-month high but closed just slightly higher. The dollar was supported by another bad day in the global stock markets and by ongoing hawkish Fed comments, but was undercut by the record May Chinese trade surplus which was bullish for the Asian currencies.
July crude oil prices this morning are trading -68 cents as the market worries about the possibility that the recent plunge in global stock markets may presage weaker global economic growth and by extension lower demand for petroleum products. In addition, tomorrow's weekly DOE report is expected to show a +1.4 mln barrel increase in gasoline inventories. July crude oil prices yesterday fell sharply by $1.27 per barrel as the market focused on near 8-year highs in crude oil inventories and rising gasoline inventories, and shook off comments by Iranian officials that their rights to nuclear research are not negotiable. The energy market is watching Tropical Storm Alberto but the storm is not expected to cause any major production disruptions in the Gulf of Mexico. [link=http://www.oxfordfutures.com/ newwindow]Commodity Broker[/link]
http://www.oxfordfutures.com/
