The preliminary June UoM consumer confidence index rose 1.3 pts m/o/m to 99.3, a bit above the estimate of 98.5. The peak in this cycle was seen in March at 101.4. The components were mixed as Current Conditions rose by 6 pts led by better household finances but Expectations were down by 1.7 pts “due to less favorable prospects for the overall economy” according to …
IP
Industrial production fell .1% m/o/m, below the forecast of up .2% and it was driven by a 7 tenths decline in manufacturing. The forecast here was for no change. Blame it on a plunge in auto production of 6.5% m/o/m and 2.3% y/o/y and I have to assume much of this is due to the sharp decline in the production of sedan’s. Machinery production fell by .9% m/o/m but is …
NY manufacturing
The June NY manufacturing survey was a better than expected 25, up from 20.1 in May and above the forecast of 18.8. It’s also the best print since October. New orders and backlogs both rose while inventories fell. Employment was a particular bright spot, rising to 19 from 8.7 and that is the best since December. Delivery Time (the higher it is the longer the lead …
BoJ/Tariff impact/ECB/EM
The BoJ kept their monetary foot firmly on the pedal continuing to believe that it is not what they are doing that isn't working in generating higher inflation but that they still aren't doing enough. "It's appropriate for Japan to continue current powerful monetary easing persistently." They are maintaining this because they trimmed their CPI forecast to a range of …
Draghi and the US data
Draghi gave the hawks what they wanted by officially declaring the end of QE by year end and held to his very dovish being by saying he won’t raise rates until after the summer of 2019. On the latter though, he assumes that inflation doesn’t get to 2% or near sooner rather than later. Draghi’s only mandate is ‘price stability’ which he defines at or near 2%. On the …
Mario’s turn
It's Mario Draghi's turn to tell us his inner most thoughts about monetary policy. While the ground has been laid for them to reveal more details about how and when QE will end, I would not be surprised if they punted until the July meeting in making a final decision. After a few days of a rally, European sovereign bonds are selling off ahead of the 8:30am press …
And the FOMC says…
The Fed upgraded their outlook on the US economy by referring to economic activity as “rising at a solid rate.” Compare this with “a moderate rate” in May. They repeated the wording on the labor market which they refer to as being strong in terms of growth and the low unemployment rate. They also said “household spending picked up” vs saying it moderated its pace from …
Inflation pressures continue to rise
Producer price inflation ran hotter than expected in May. The headline gain was .5% m/o/m and 3.1% y/o/y vs the forecast of up .3% and 2.8% respectively. That headline y/o/y print is the highest since December 2011. The core rate was up by .3% m/o/m and 2.4% y/o/y, both one tenth more than expected. Of note was the 4th .3% m/o/m increase in goods prices ex food and …
Big day
In addition to raising the Fed funds rate by 25 bps today to a range of 1.75-2%, the Fed will also raise the interest paid on excess reserves by just 20 bps for the 2nd meeting in a row in order to get the effective (actual) fed funds rate to the middle part of their range. It has been trending up towards the upper end of the range. They will also likely tweak the …
Inflation
The May CPI rose .2% m/o/m both headline and core as expected. This brings the y/o/y gain to 2.8% and the core rate to 2.2%. That core rate is one tenth from matching a 10 yr high. Energy prices jumped by 12% y/o/y led by gasoline. Food prices were up by 1.2%. Services inflation ex energy, the persistent push on higher prices, was up .3% m/o/m and 3% y/o/y driven …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.