Inflation should remain subdued in the U.S. for now. Nevertheless, numbers might again rise in the medium term, along with commodity prices. The U.S. dollar, in the mean time, is testing recent lows, albeit a definite trend has yet to be discovered.
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U.S.: unemployment rate to grow?The economic grow is weak the United States with some areas improving better than others. The real estate market, as an example, has found a bottom at current levels, while the unemployment rate remains high and could increase in the future. Deleveraging is not over and small/medium size businesses are now under pressure. CIT group could not refund USD 1 billion in debt that will mature in August and the company should now accept USD 3 billion loans from bondholders to avoid bankruptcy. CIT¡¦s meltdown would have spread into the retail industry, since about 60% of the footwear and apparel products rely on the company. In effect, economic data remains inconsistent and fragmented. After having slumped 1.2% in May, industrial production declined only 0.4% in June (-0.7% expected). Nonetheless, capacity utilization printed 68.0%, which corresponds to the worst number in history. Retail sales rose 0.6% in June, versus May¡¦s gain of 0.5%, supported by the increase of 2.3% in auto sales. However, sales were up only 0.3% excluding motor vehicles. Angelo Airaghi is a Commodity Trading Advisor, registered with the National Futures Association and the Commodity Futures Trading Commission. He has been an active professional since 1990 working for major international financial companies. In the past 10 years, Angelo Airaghi has been an analyst and commentator for national and international media. This article contains the following sections:
U.S.: unemployment rate to grow?
Europe: global trade still negative
EUR/USD: at resistance line
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