Dollar hit as year-end U.S. rate hike bets cool after weak data

15 July, 2017, 05:38 | Author: Leticia Walters
  • Treasury yields tumble after weaker-than-expected retail sales, inflation

Lyngen said fed funds futures were reflecting odds for another rate hike this year of just 46 percent, down from 52 percent before the data, according to Lyngen. Other data on Friday showed industrial production picked up in June, driven by a surge in oil and gas drilling.

Joel Naroff of Naroff Economic Advisors told clients the economic picture facing the Fed was clearly not what the central bank hoped for.

The labour department reports consumer price inflation for June at 8.30am in Washington on Friday, and the figures could either round out four months of sub-par progress or suggest that the slowdown is - as the Fed has been saying - transitory. Senior officials at the central bank had believed the slowdown in inflation was temporary, but are now reconsidering their stance. The annual core inflation rate was 1.7 per cent, the same as May but six-tenths slower than January. The year-on-year CPI has been retreating since February, when it hit 2.7 per cent, which was the biggest increase in five years. Excluding food and energy, prices rose 0.1%.

As a reminder, the FOMC has a target of 2.0% to 2.5% for annualized inflation. Prices for USA government bonds rose and stocks on Wall Street edged higher.

However, "The current data provide few reassurances for the Federal Reserve" about the growth outlook, economist Diane Swonk said. That was below the 0.1% gain expected by economists. The Bank of England's trade-weighted index stood at 77.1, nearly 5 percent above seven-year lows hit last October, but 2.5 percent off highs hit in May when financial investors were banking on an electoral landslide for the ruling Conservatives. But rental costs rose, with owners' equivalent rent of primary residence increasing 0.3 per cent after advancing 0.2 per cent in May. Retail sales of gasoline were down 1.3%, based largely on lower prices. Food and beverage stores were down 0.4%, department stores were down 0.7% and restaurant sales were down 0.6%.

Overall retail sales fell 0.2 per cent for the month to US$473.5 billion, a surprise to analysts who had forecast an increase of 0.1 per cent. "Our baseline is they still do the balance sheet in September, and they hike rates in December".

Anglo American, with considerable South Africa exposure, also benefited from the country suspending implementation of a new mining law which analysts had said could negatively impact firms.

But the view that age determines when boom turns to bust has come under question in an era of abnormally low interest rates and at a time when central bankers are struggling to combat anaemic readings of output, productivity and wage growth. He sees support at 95. It has declined from a high of 98.5 in January.

The U.S. data bolstered expectations that the U.S. Federal Reserve would likely to move slowly to continue raising interest rates in the absence of inflation signs.

Still, growth in the second quarter likely got a lift from the industrial sector of the economy. June marked the third consecutive 0.1% gain on the core rate.

Recommended:

  • Watch Stan Lee's emotional speech at the Disney Legends Awards

    Watch Stan Lee's emotional speech at the Disney Legends Awards

    The ceremony began with Iger kicking things off by remarking, "This is the largest gathering of Disney fans in the world". Fisher, daughter of actor Debbie Reynolds and singer Eddie Fisher, died from sleep apnoea and other causes .
    Short Interest in Wal-Mart Stores, Inc. (NYSE:WMT) Drops By 12.3%

    Short Interest in Wal-Mart Stores, Inc. (NYSE:WMT) Drops By 12.3%

    The firm has "Buy" rating given on Friday, August 14 by Argus Research. (NASDAQ:DLTR) on Friday, June 30 with "Buy" rating. The Masters Capital Management Llc holds 953,000 shares with $65.87M value, down from 1.00 million last quarter.
    England v South Africa: Watch the pick of the day one action

    England v South Africa: Watch the pick of the day one action

    In this innings, he joined Morris to carry South Africa past 300 after they had lost four wickets in a span of 56 runs. On the other hand, South Africa committed basic mistakes and fell flat in the series opener.
  • Testing A Soft Artificial Heart

    Testing A Soft Artificial Heart

    In tests the heart worked quite well, pushing a blood-like fluid along against body-like pressures. Like a human heart, it has a left and right ventricle, but they're not separated by a septum.
    Supreme Court Orders CBI Probe Into 98 Alleged Fake Encounters in Manipur

    Supreme Court Orders CBI Probe Into 98 Alleged Fake Encounters in Manipur

    In her report, she added that this was symptomatic of the "state's disinterest, the impunity enjoyed by the Armed Forces". The apex court has directed the CBI to form an SIT to probe the cases.
    Yankees say Michael Pineda needs Tommy John surgery

    Yankees say Michael Pineda needs Tommy John surgery

    Cashman said that Mitchell, along with Luis Cessa and Chance Adams, would be considered for more permanent spots in the rotation. The 28-year-old will become a free agent after this season, meaning his stint in pinstripes is likely over.
  • Summer's first mosquitos with West Nile virus found in province

    Summer's first mosquitos with West Nile virus found in province

    West Nile virus was found in a bird in Santa Cruz County Wednesday, the first find this year, county officials said today. There are no reports of people being infected, but the Health Unit says the virus is definitely in Simcoe County.
    Sprint has reportedly approached Warren Buffett about an investment

    Sprint has reportedly approached Warren Buffett about an investment

    Sprint , Berkshire Hathaway and Liberty Media did not immediately respond to Reuters requests for comment. The Malone company is the biggest shareholder in No. 2 USA cable company Charter Communications Inc.
    Narcos Gets Season 3 Premiere Date

    Narcos Gets Season 3 Premiere Date

    The first two seasons of the series followed the rise and fall of Colombian drug kingpin Pablo Escobar , played by Wagner Moura. This time around, all rules have changed for the narcos and their opponents - a fact many won't realize until it's too late.
  • 'The Biggest Marketplace On The Dark Web' Gets Busted By Authorities

    'The Biggest Marketplace On The Dark Web' Gets Busted By Authorities

    The site remained essentially inaccessible for days after the fact, prompting some users to speculate about an exit scheme. Cazes was arrested at the Private House housing estate on Phutthamonthon Sai 3 Road in Thawi Watthana district on July 5.
    Cilic Powers Past Querrey and into Wimbledon Final

    Cilic Powers Past Querrey and into Wimbledon Final

    Federer is bidding to join Bjorn Borg (1976) as the only men in the Open Era to win Wimbledon unblemished. He will face Marin Cilic in the final on Sunday in what will be the Croat's first ever Wimbledon final .
    Froome cracks as Aru blows Tour de France wide open

    Froome cracks as Aru blows Tour de France wide open

    Warren Barguil , who narrowly missed out on the Stage 9 victory, got one today on the short, hard stage to Foix . He too was reluctant to start banging nails into Froome's coffin, though.


Popular

Scientists splice a GIF into the DNA of a living organism
This was discovered by sequencing the whole genome of mice that had previously undergone CRISPR gene editing. Nucleotides, which are basic building blocks of DNA , are used as the code for each individual pixel.

USA extends Sudan sanctions review period by three months
In his executive order issued on Tuesday, Trump extended the deadline, saying "more time is needed" for the review. A series of benchmarks were set for Sudan to achieve in exchange for the permanent lifting of sanctions.

Grassley may subpoena former Trump campaign chairman
Donald Trump Jr . sits down to a round-table discussion at the Talk Media News radio row in Manchester, N.H., February 8, 2016. In March, the Trump administration abruptly asked for the resignation of all 46 US attorneys across the country.

Nebraska CB Chris Jones named to watch list
Thorpe excelled as a running back, passer and kicker on the offensive side of the ball, but also stood out as a defensive back. Who are some of the top names on this list this season? The award is named in honor of multi-sport legend Jim Thorpe.

American Doctor Approved to Travel to United Kingdom in Charlie Gard Case
The doctor estimated a 10% chance of improvement in muscle strength and a "small but significant" improvement in brain function. Francis offered a reassuring word, saying: "I understand you walking out because it is a desperate situation".