Euro inflation unchanged, Commodities rout continues and China stocks worst monthly decline in six years. Here are some of the things that people in markets are talking about this morning.
This morning’s flash estimate of inflation from Eurostat, the European statistical agency showed euro-area inflation unchanged at 0.2 percent in July, in line with the median forecast of economists surveyed by Bloomberg. Core inflation unexpectedly rose to 1 percent, the highest rate in 15 months.
Commodities rout continues
Commodities extended their worst monthly fall since 2011, with the Bloomberg Commodity Index set for a 10 percent slump in July. The broad-based sell-off has seen oil drop with WTI down 19 percent and gold fall 7.5 percent during the month. Meanwhile the U.S. dollar spot index is 2.6 percent higher as expectations of Fed tightening increased.
The Shanghai Composite Index dropped 1.1% in Friday trade to cap its worst monthly performance since August 2009. The index has fallen 14 percent, the biggest loss among 93 global benchmarks tracked by Bloomberg. The fall comes in spite of unprecedented government intervention in the Chinese equity market.
Japanese inflation barely grew in June with consumer prices excluding fresh food rising 0.1 percent. Inflation in the Tokyo dropped bu 0.1 percent under the same measure. With the Bank of Japan still falling far short of its 2 percent target, Abenomics is starting to come under pressure. The median estimate of economists surveyed by Bloomberg is for a drop in GDP growth to 0.8 percent in the quarter ending June from the previous quarter’s 3.9 percent.
Employment Cost Index
Bloomberg News executive editor for economics, Dan Moss highlights the release at 8:30 a.m. ET of the quarterly Employment Cost Index by the U.S. Bureau of Labor Statistics. The index, which is another way of tracking labor costs, has been accelerating in recent quarters. And it offers some hope that average hourly earnings will also rise. Morgan Stanley is looking for year-on-year growth of 2.6 percent.