- Australian retail sales beat expectations
- People’s Bank of China (PBOC) calms fears over Yuan devaluation
By Denzil Rickerby
After last night’s football excitement, today may be a serious damp squib. Pub landlords everywhere may still be celebrating at least one more England Football match to drag punters in but the US markets will be closed today for their 4th of July celebrations and with little data in Europe, a very subdued Wednesday is likely in the financial markets.
The markets yesterday breathed a sigh of relief after the People’s Bank of China (PBOC) have said that they would not pursue a 'currency war' by devaluing the Yuan. This caused a risk-on mood in the market, benefiting mainly the commodity currencies. However, the trade tariffs from the US are coming into effect on Friday. So although the PBOC might not devalue the Yuan, there is still a chance of retaliation from the Chinese government, especially after last week’s aggressive rhetoric from Chinese President Xi Jinping who said China is ready to take a bareknuckle approach to a trade war.
To prevent the German government from collapsing, Chancellor Angela Merkel has agreed - in part - to a compromise, which will make it harder for migrants to enter the country. German Social Democratic Party (SPD) leader Nahles, said they have made progress on migration but there is no agreement yet and the three parties plan to resume talks on Thursday. However, for now, it does appear Chancellor Merkel has dodged yet another bullet to save her fragile coalition.
Australian May Retail sales printed at +0.4% month on month vs the expected +0.3%. High household debt and slow wage growth has been holding back consumer spending so this better than expected result is a nice surprise for the Australian economy. The AUD held its own and gained a little overnight.
According to sources, The European Union will consider a tariff-cutting deal between the world's big car exporters to prevent all-out trade war with US. The EU would look to see if it is feasible to negotiate a deal with other big car exporters such as the US, South Korea and Japan. This move could address Trump’s complaint that the US sector is unfairly treated. Although EU President Tusk says the EU is prepared for worst-case scenario on trade with the US.
And, during this hot weather, the Daily Mirror is offering helpful advice to those who want to bare all and sunbathe naked in their own gardens. They say it is not illegal to be naked in public unless it causes distress or alarm to others. I kind of think that rules me out then. Good luck to the less distressing naturists out there.