Daily update
Daily update
- Yesterday’s central bank decisions support the trend of following inflation lower. The Swiss rate cut reflected a desire to stabilize real rates, not stimulate the economy. Bank of England Governor Bailey linked future rate cuts to lower inflation; an August rate cut looks increasingly likely. Only the Federal Reserve seems to have forgotten that rising real rates are repressive.
- Japan’s May consumer price inflation rose on higher energy costs, but rose a little less than had been anticipated. Domestic demand does not appear to be especially strong, with goods prices generally more subdued. Durable goods inflation is still positive, but has slowed a lot.
- UK retail sales rebounded in May (a few hours of sunshine can stimulate consumers’ willingness to spend). Revised April data was less gloomy. (The figures are volume data, and price discounting may have tempted more consumers out). It does seem unlikely that last month’s online retail therapy will have any bearing on voters’ decisions next month.
- South Korean exports in early June were strong, aided by technology exports and sales to China and the US. Obviously artificial intelligence boosts technology demand as corporate CEOs feel that they should be seen to be doing something (even if they are unclear what they should be doing).
