Dwelling prices strengthening in capital cities

Australia: 

Dwelling prices continued to strengthen in most capital cities in July, according to CoreLogic RP Data. 

Australia-wide capital city dwelling prices rose 2.8% in July, following on from a 2.1% increase in June. Annual growth in prices rose 11.1% in the year to July, up from 9.8% in the year to June.

The AiG manufacturing PMI improved, rising to a reading of 50.4 in July, from 44.2 in June. The reading above 50 indicates Australian manufacturing activity expanded in July.

ANZ job ads fell 0.4% in July after rising by a downwardly revised 1.2% in June (previously reported as a 1.3% lift). For the year to July, job ads are up 9.3%, down from 10.8% in the year to June.

The TD-MI inflation gauge rose 0.2% in July, after rising 0.1% in June. For the year to July, inflation was up 1.6%, up from 1.5% in the year to June. The TD core measure of inflation rose 0.1% in July and 1.5% over the year.

HIA new home sales rose 0.5% in June, after falling 2.3%in May.

Share Markets: 

US shares were modestly lower, weighed down by weaker commodity prices and softening manufacturing data from the US and China.

The Dow closed 0.5% lower, and the S&P500 fell 0.3%.  Stocks in Europe were mixed - German and French indices were higher, but the FTSE100 was lower. 

Greek stocks slumped 23% at the open, trading for the first time in five weeks.

Interest Rates: 

US treasury yields fell following last night's run of economic data. A subdued inflation outlook and falling oil prices weighed on yields, particularly at the longer end of the curve. 

Yields on 10-year treasury notes fell 3 basis points to 2.15%.

In Australia, implied yields on 10-year bond futures fell 7 basis points 2.72%, and on 3-year bonds dropped 3 basis points to 1.86%.

Foreign Exchange:

The US dollar edged slightly higher against a basket of currencies. Meanwhile, the Australian dollar was near its six-year low, following weaker Chinese data and lower commodity prices.

Commodities:

Commodity prices fell, with the key CRB index falling to its lowest in 12 years. Oil prices dropped 5% following weak factory data in China and concerns over excess global supply.

Copper prices were also weighed down by concerns over China. Gold prices similarly fell sharply.

China: 

The Caixin manufacturing PMI fell to 47.8 in July, down from an early flash estimate of 48.3 and a reading of 48.2 in June.

A reading below 50 signals contraction in manufacturing activity.

Europe:

The Markit manufacturing PMI was revised slightly higher for July from 52.2 to 52.4 in the final estimate.

United Kingdom: The manufacturing PMI edged higher from 51.4 to 51.9 in July.

United States:

US ISM manufacturing fell from 53.5 to 52.7 in July, the lowest in three months, but still above 50 signalling expansion.

In contrast, the manufacturing PMI from Markit was unchanged at 53.8 in the final estimate for July, up from 53.6 previously.

Construction spending rose only 0.1% in July, weaker than the 0.6% expected. However, May's result was revised up from 0.8% to 1.8%.

Personal income grew 0.4% (versus a consensus estimate of 0.3%) and spending rose 0.2%, in line with expectations.

The core PCE deflator rose 1.3%, the preferred inflation measure by the Federal Reserve, and suggests that price pressures remain well contained. 



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