Japan: Service demand falls as stimulus boosts wane
Japan’s demand for services fell in May, adding to signs that the export-fueled recovery has been slow to spread to households. The tertiary index, which captures 63% of the economy, slid 0.9% from April, when it advanced a revised 2.4%. (Bloomberg)
UK: BOE’s Sentance says ‘gradual’ rate rise will support recovery
Bank of England policy maker Andrew Sentance said a gradual interest rate increase from a record low to fight inflation will help support the economic recovery. “If we can raise interest rates in a gradual way, that will be helpful for the recovery because it will mean there won’t be a big shock to the business community,” he said. (Bloomberg)
US: Confidence tumbles risking slowdown
Confidence among US consumers tumbled in July to the lowest level in a year, heightening the risk of a slowdown in economic growth. The Thomson Reuters preliminary index of consumer sentiment decreased to 66.5, the lowest since August and less than the most pessimistic forecast of economists surveyed. (Bloomberg)
US: Manufacturing contracts, prices drop
Manufacturing in the US contracted in June by the most in a year and wholesale prices declined more than anticipated, underscoring the Federal Reserve’s reduced forecasts for economic growth and inflation. Factory output fell 0.4% in June, while producer prices slid 0.5% after a 0.3% decline the month before. (Bloomberg)
US: Prices excluding food, fuel exceed forecast
The cost of living in US excluding food and energy prices, climbed in June more than forecast, easing concern that a slowdown in growth will spur deflation. The core rate of the consumer price index increased 0.2%, the most since October. Prices overall fell 0.1%, a third straight decrease. (Bloomberg)
U.S: Demand for long-term assets weakened in May as investors abroad sold stocks and foreign central banks reduced their holdings of Treasury bills. Net buying of long-term equities, notes and bonds totaled USD 35.4b for the month, compared with net purchases of USD 81.5b in April. Including short-term securities such as stock swaps, total net flows were USD 17.5b, compared with USD 13b the previous month. (Source: Bloomberg)
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