At the same time the consumer prices grew 0
June 4, 2012 7:18 AM
Made under the fire of conflicting economic statistics, foreign exchange markets have experienced a rather volatile session yesterday. The dollar finished higher against the European currency (to 1,2357 dollar against 1 euro) and fell against the yen, to 109,65 yen. The violent earthquake which shook the archipelago did not affect the Japanese currency, which is at the top for nearly seven weeks.
The greenback was generally supported by the publication, residents came to the United States in June, far higher than expected Monday, capital flows. Foreign investors purchased American assets $ 71.2 billion this month, 55.8 billion in May.
Even though it is largely sufficient to fill the deficit of the balance of payments, however this figure is less favourable than it seems at first glance: "despite the progress and the relatively high amount of capital inflows to the US in June, the analysis of the series reveals two trends to be monitored closely for the next months, reported foreign exchange dealers of the Socit Gnrale. The sharp decline of capital inflows to the obligations of State the Treasuries and low amount entries to the shares. "Indeed, the bulk of the capital placed by non-residents across the Atlantic have been on the obligations of companies. A segment rather random because it depends on the amount of debt issued by corporations.
Relaxation of long rates
Yesterday, two other indicators offered an image contrasted the US economy. With a monthly gain of only 0.1 in July, industrial production has disappointed observers, as the progression of the month of June has also been reviewed in slight decline. Accordingly, the industrial capacity utilization rate fell to 79.7. At the same time, the consumer prices grew 0.5 one month on the other, mainly under the effect of soaring oil. Non-energy, inflation is rising that 0.1 is a little less that it expected the markets.
These indicators have strengthened the sense of a measured increase in interest rates from the Fed in the coming months, which had resulted in a strong relaxation of long rates. The performance of the 10-year loan fell by 7 basis points, at 4,213.
This does not prevent stakeholders remain very enthusiastic on the prospects for activity in the United States. It is clear from the last monthly survey by Merrill Lynch to the main international fund managers. They are now largely convinced that the economy will re - accelerate. Two months ago, they were convinced to the contrary.
Similarly, they reviewed increase their beneficiaries forecasts for business in the coming months, even if they are still a majority to predict a downturn in these benefits. "We are surprised by the answers that have been made in the context of tightening of the rates of the Federal Reserve, flattening of the curve of rates and a barrel of oil exceeding $ 65", explained Merrill Lynch strategists. "But in reality, it seems that investors are beginning to bet on the fact that companies could soon increase their capital expenditure, to take advantage of the financial conditions which remain favourable." Half of managers surveyed by the American Bank believe that the companies currently tend to be sous-investies in their industrial tool.
Step of alarmism on inflation
This optimism on growth is not alarmist predictions about inflation accompanied: 65 of managers expect that inflation will be slightly higher at horizon a year. In these conditions, 77 bet on "slightly higher" short-term interest rates, twelve months before. Nevertheless, surprises are possible in this area, as 71 of the interviewed managers believe that a neutral Fed interest rate falls to 4 or below. But most economists expect instead a basic interest rate to 4.25 at year end. Exchange survey fits perfectly to the current movements. In net terms, 16 of the managers feel the dollar and the euro overvalued. Conversely, 43 feel undervalued yen, or 12 from the previous month. Therefore there is still a margin of progression for the latter.