THE TAKEAWAY: UK June Retail Sales beat expectations > US Initial Jobless Claims are 334K for week of July 13, better than the 345K expected > Bernanke reiterates yesterday’s statements in today’s testimony to Senate
Several positive economic data releases helped fuel optimistic global sentiment today. First in Europe, the UK released retail sales numbers that largely beat expectations: +2.1% June y/y actual; +1.6% Bloomberg News survey expected; +2.3% prior (revised up from +2.1%). This marks a second consecutive month of above +2.0% retail sales growth. Note that these retail sales numbers were aided by department store discounts.
On the US side, there were multiple positive data releases. The first was the weekly Initial Jobless Claims data, which came in at +334K, well below the +345K Bloomberg News survey expected. The next piece of data was the Philadelphia Fed survey: 19.8 July actual; 8.0 Bloomberg News survey expected. This marks the highest Philadelphia Fed reading since March 2011.
Additionally in the US, Bernanke delivered his policy report to the Senate. Many of his comments were reiterations of his statements yesterday to the House. Bernanke did interestingly say that the jobless rate may be too optimistic a gauge for the economy.
Equities continue to lead the way as most markets trade bullish. The S&P is notably reaching record highs, currently at 1690.56 at the time of writing. Market fears are also mostly dissipating as the implied volatility in the market, measured by the CBOE Volatility Index (VIX), drops -1.02% to 13.64 at the time of writing – significantly below its 20+ levels during mid-June. Developed and emerging markets both share the gains today with China lagging: S&P +0.57%; Euro Stoxx +1.35%; FTSE +0.95%; Nikkei +1.32%; Hang Seng -0.12%; Bovespa +0.64%; Sensex +0.90% at the time of writing.
Bond markets are also trading mostly stronger, most noticeably in the Eurozone and in EM. 10YR government bond yields trade as follows: US +3.2bps (+1.28%) to 2.521%; Singapore -8.9bps (-3.56%) to 2.405%; Brazil -6.9bps (-1.72%) to 3.929%; Germany -2.4bps (-1.55%) to 1.517%; Portugal -18.5bps (-2.64%) to 6.817% at the time of writing.
Commodities continue to trade the most mixed with WTI rallying and base metals mostly falling: WTI +1.32%; Brent -0.04%; LME Copper -1.54%; COMEX Copper -0.03%; Shanghai Copper -1.43% at the time of writing. The Brent-WTI spread continues to narrow and is at $0.86 at the time of writing.
In FX markets, dollar strength continues. The Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) gains +55 (+0.50%) to $108862 at the time of writing.
