Yen Is Recovering, Yields Weakened, G7 Summit Next

Market Reviews

Japanese Yen is recovering as 10 year yield dropped -0.042 to 2.933. Today’s focus is G7 summit in Canada. As we already know, the meeting will be all about Donald Trump’s trade policy. The President, however, will leave the summit earlier to prepare for the coming meeting with Kim Jong-un in Singapore. Emmanuel Macron commented: “maybe the American president doesn’t care about being isolated today, but we don’t mind being six, if needs be”, adding that: “because these six represent values, represent an economic market, and more than anything, represent a real force at the international level today.”

The Confederation of British Industry forecasts Britain’s economic growth to slow in 2018 and 2019. Real Gross Domestic Product growth is expected to mark 1.4% this year and 1.3% in the next year. Eurozone growth should point at 2.2% this year and 1.7% in the next year.

US growth, on the other hand, is projected to indicate 2.% this year and 2.3% in the next year. Japan’s growth is expected to be at 1.1% in both 2018 and 2019. India should remain at 7.3% this year and 7.1% in the next year. China’s growth is projected to drop to 6.3% this year and 5.8% in the next year. The Confederation also forecasts a BoE rate hike in the third quarter of 25 basis points in 2018, and also in the first quarter and fourth quarter of 2019. Inflation is expected to reduce to 2.1% at the end of 2019.

China’s trade surplus fell to 24.9 billion dollars in May. Exports increased 12.6% yoy to 12.8 billion dollars. Imports were up 26.0% yoy to 187.9 billion dollars. In terms of yuan, exports lifted 3.2% to 1341 billion yuan. Imports grew 15.6% to 1185 billion yuan. Trade surplus fell to 157 billion yuan.

For the period of January to May, exports to US were up 13.6% yoy to 175.17 billion dollars. Imports from the US rose 11.9% yoy to 70.32 billion dollars. Trade surplus to the US marked 104.85 billion dollars. Total trade with the US increased 13.1% to 245.50 billion dollars. Meanwhile, for the same period, exports to EU surged 12.0% yoy to 155.39 billion dollars. Imports from EU were up 19.9% yoy to 110.21 billion dollars. Trade surplus to EU made up 45.18 billion dollars. Total trade with EU grew 15.1% yoy to 265.60 billion dollars.

Japanese Gross Domestic Product of the first quarter stood at -0.2% qoq. GDP deflator marked 0.5% yoy. Current account surplus rose to 1.89 trillion dollars in April. Today, Germany will release trade balance and industrial production, Canada will feature job data and housing starts.