Stocks stagnate, investors analyze economic data and dollar plummets for third day

LONDON (Reuters) – The first weekly loss since May has been on the brink of falling, and the dollar has fallen for the third consecutive day, even a stronger-than-expected inflation in the United States. United has not shaken the Federal Reserve. interest rate reductions.

European stocks skyrocketed early trading after a series of modest declines this week and as investors also digested a weekend blizzard of Chinese data from Asia.

China's yuan-denominated exports grew 6.1 percent in the first half of this year compared to the previous year, while imports rose 1.4 percent. In addition, its trade surplus with the United States, a major source of friction with its main trading partner, reached $ 29.92 billion in June, up from $ 26.9 billion in May.

(China's trade: imports and exports (here)

The data come after a series of disappointing economic reports from around the world, which showed that the global economy was suffering from a long trade war between the United States and China, which forced the major central banks to take a longer stance. accommodative.

China is also expected to release its GDP figures for the second quarter on Monday, which should show that the world's second-largest economy is slowing at its weakest pace in at least 27 years.

Industrial production figures for the eurozone are expected at 09:00 GMT and could be an important factor for the European Central Bank to move in the direction of relaxation, economists are not convinced that these figures would indicate signs significant recovery.

"The industrial output of the euro area is expected to increase by 0.9% in May, according to country releases we have communicated so far," said RBC analysts in a note.

It would be the best monthly expansion of industrial production in the euro area since January, they added, even if it will lead to a significant contraction from May 2018.

There was a big divergence in the estimates recovered by Reuters, the most optimistic predicting a monthly rise of 0.9% and the most pessimistic a fall of 0.5% – the same result as in April.

Last month, policymakers at the European Central Bank agreed on the need to be ready to revive the eurozone economy in an atmosphere of "increased uncertainty," revealed on Thursday. the official record of the meeting.

In Asia, the broadest MSCI index, comprised of Asia-Pacific equities outside Japan, fell 0.1%.

Against a basket of currencies, the dollar was down for a third day in a row, down 0.1%. A more vigorous than expected reading of the defeat has not shaken the belief that the Federal Reserve will begin to cut interest rates at a political meeting later this month.

The main consumer price index, excluding food and energy, rose 0.3% in June, the largest increase since January 2018, according to data released on Thursday.

Reading pushed US Treasury yields higher, but the money markets still showed a rate cut at the end of July and a cumulative reduction of 64 basis points by the end of 2019 .

Comments by Charles Evans, president of the Chicago Fed, are expected later Friday and John Williams, president of the New York Fed, will allow the United States to measure the dovish of the central bank, said Masafumi Yamamoto, strategist Chief of Foreign Exchange at Mizuho Securities.

"If these Fed officials are not as accommodating as Powell, and if the manufacturing survey of the New York Fed on Monday is stronger than expected, it could show that the decline of the dollar following the testimony of Powell at Congress was excessive ".

Elsewhere in currencies, the EUR / EUR = EBS was boosted by a sell-off in the German bond market, up 0.1% to $ 1.1270.

Security haven The German government bonds have been sold for their biggest weekly sale for nearly a year and a half, while signs of economic might in the United States and parts of Europe left predict a burst of recession.

Oil prices have been close to the highs of the last six weeks and were on track for a weekly gain as US producers in the Gulf of Mexico cut production by more than half due to a tropical storm and lingering tensions in the Middle-East.

Brent, a global benchmark, rose 0.77% to $ 67.03 per barrel. US CLc1 crude WTI (West Texas Intermediate) rose 0.68% to $ 60.57 per barrel.

Gold prices, weakened by stronger than expected US consumption inflation data, have regained their luster thanks to renewed commercial concerns and expectations of rate cuts. Spot gold was traded for the last time, up 0.5%, to $ 1,410.99 an ounce.