Global Macro Perspectives
Demand is strengthening, crude oil stocks declined, distillates mostly unchanged. Supply/demand balance is tight.
Release of strategic reserve will have, in my view, relatively small effect on supply/demand balance, so the price weakness is probably short-term.
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Conference Board consumer confidence came out at 58.5 vs. 61.0 consensus and 61.7 reading for May (revised from 60.8).
Weakening…
Seasonly adjusted S&P/Case-Shiller HPI 10 city was unchanged in April; On year level 10 city index is down 3.1%.
U.S. personal income rose 0.3% in May vs. 0.4% consensus and revised (down 0.1%) 0.3% rise in April. On y-o-y level personal income is up 4.2%.
Baltic dry index rose 0.1% last week; Capesize Index was up 8.2%; Panamax Index fell 7.8%; Supramax Index was up 0.2%; Handysize Index fell 1.8%.
Iron ore inventory high, price moved lower; Both steel inventory and price moved lower; In coal both price and inventory moved up. Historically speaking coal inventory is low.
U.S. railroads originated 294,310 carloads, up 3.3% compared with the same week in 2010 and down 1.6% compared with 5-year average. Week over week change was 1.4%.
Almost no growth compared with 2010.
Baltic Dirty Tanker Index rose 1.9%; Baltic Clean Tanker Index rose 7.6%.
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U.S. new home sales fell 2.1% to 319.000 SAAR; Consensus was at 305.000 SAAR, prior reading (revised upward 3.000) was at 326.000 SAAR.
Chicago Fed National Activity Index for May was reported at -0.37 vs. revised April reading of -0.56. Chicago Fed National Activity Index 3-month moving average is at -0.19.
CFNAI is pointing to mild economic growth.
Initial jobless claims in the U.S. were reported at 429.000 vs. 415.000 consensus and last week revised (up 6.000) reading of 420.000.
HSBC/Markit China PMI for June fell from 51.6 to 50.1. This means industrial production growth is slowing down to something like 13%.
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FED acknowledged the recent slowdown in economic growth but the committee believes slowdown is only temporary. Committee expects that the pace of recovery will pick up and inflation rate subside to levels at or below those consistent with the FED’s dual mandate.
Asset purchases will be completed this month.
No indications of any new policies (jet).