By IFCMarkets
Strong economic data came out in US on Friday which pushed the US dollar up. Stock market indices slightly retreated after strong growth during a week and having hit fresh historical highs on Thursday. This was supported by global political risks caused by terror attack in France and crashed coup on Turkey. US retail sales in June rose more than expected. Thanks to that the core retail sales for Q2 showed record growth in recent 10 years of 4.5%. Another positive was the increase of industrial production in June by 0.6% after it fell 0.3% in May. After the data on Friday the Atlanta Fed revised up forecast of US GDP growth in Q2 to 2.4% from 1.1% in Q1. Investors now expect the total earnings of S&P 500 components to contract by 4.7% which is better than the previously expected fall of 5%. US dollar strengthened on Friday on data that the June inflation rose to 2.3% year on year after 2.2% in May. This is better than the US average 10-year inflation of 1.9%. Strong consumer prices increase is one of the key factors for the Fed rate hike. The US regulator takes into account core inflation which is 1.6% now. The rate may be hiked if core inflation surpasses 2%. No significant data are expected today in US.
European stocks opened up on Monday due to strong performance of British chip maker ARM Holdings stocks which surged 43%. The company may be acquired by SoftBank Group for 24.3bn British pounds. After an optimistic opening the European stocks retreated. Market participants focused on political risks in France and Turkey. No significant economic data came out in EU. The British FTSE 100 index rose and is now 5% above its level before Brexit. Investors may think that Britain may benefit from its exit from EU.
Japanese financial markets are closed today due to the holiday – Marine Day.
Copper edged lower on Monday after the news came out that real estate price growth slowed down in June in China for second straight month. Market participants worry the slowdown is caused by lower demand and may lead to lower copper consumption.
Sugar prices edged lower after the Brazilian agricultural corporation Unica said its production rose in main regions of the country to 2.8mln tonnes in second part of June from 1.2mln in first half. The association forecasts the sugar production is to surge by 20% in Central and Southern regions of Brazil this year.
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The net longs in cotton reached the high since August 2013 on US ICE exchange while net longs in coffee – the high since November 2014, according to U.S. Commodity Futures Trading Commission. The coffee prices reached on Friday their record high in 17 months and started correcting down.
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