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Commentary for 7/29/2016

Altavest Commentary for 07/29/2016

The BOJ surprised by not cutting its policy rate. Still, equities there whipsawed. The Nikkei 225 ended up +0.56%. Most other Asian markets were lower, with the Shanghai Composite down -0.50%.
Eurozone Q2 GDP was in line with expectations, +0.3% q/q and +1.6% y/y. Unemployment was unchanged at 10.1% and July core inflation was unchanged at +0.9% y/y. European equities were modestly higher with the DAX up 0.61%. Yields on the 10-yr. Bund continue to fall, now at -0.120%
Advance Q2 GDP was a stunning +1.2%, well below expectations. The Chain Deflator was +2.2% and the Employment Cost Index was +0.6%. July Chicago PMI fell to 55.8 but better than expectations, while Final July Michigan Sentiment was 90.0, below expectations. Baker Hughes reported an increase in the rig count of 3 to 374, the 5th weekly increase in a row.
Yields on the 10-Year Note sagged to 1.455% and the US$ Index fell sharply. Gold jumped to $1,357.50. The weak US$ helped support oil prices which began the day lower and then moved higher closing up 1.1% to $41.60.
Equities stumbled out of the gate on weak data, but ratcheted higher on lowered expectations of Fed tightening. At the end of a seesaw day, markets tacked on modest gains.

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