Core US inflation – excluding food and energy – saw the price index rise by just 0,1% in June. This still 'cold' price trend signals less danger of an imminent rate normalization and Wall Street reacted positively yesterday (S&P500 at all-time high). Asia does not have to be prayed for and the MSCI Asia Pacific regional index continued its positive streak with a 0,4% increase (Tokyo stable, Shanghai +0,2%, Jakarta +0,5% following the victory of Joko Widodo in the presidential election). The geopolitical convulsions have given themselves a break – just enough to reduce the prices of gold (1309 $/ounce) and of oil which dropped (WTI) to 102 $/b, widening the differential with Brent (to 107,2 ).
The real estate market trends show house prices still rising in America (which is positive because it reduces the number of houses whose value is less than the residual mortgage debt) and slowing down in China: it is probable that Chinese banks will offer discounts on mortgage rates to support a market in a more cautious phase.
The yen is stable at 101,4 against the dollar, while the euro has weakened sharply and stands at 134,5. The Australian dollar strengthened following higher-than-expected inflation, which reduces the prospects for a reduction in key rates.
