Thursday's Markets Update (July 13, 2023)

14 Jul 2023 by rate3

On Thursday, initial jobless claims unexpectedly pointed to the tight labor market, while producer prices surprised on the downside. NASDAQ (o: 14,021, c: 14,155) responded with steady growth throughout the day. Meanwhile, BTC (o: 30,520, c: 31,606) jumped 3.5%, dragging with it several major coins (including ETH, MATIC, and Cardano), propelled by a ruling regarding XRP (which added more than 70% in a few hours).

Details
According to BLS statement producer prices rose 0.1% in June, below expectations. service prices experienced a slightly higher increase of 0.2%, primarily driven by deposit services. On the other hand, goods prices remained unchanged overall. However, within the goods category, gasoline prices saw a notable rise of 3.4%, while iron and steel scrap prices declined by 10.8%. The statement also mentions that year-on-year, producer prices increased by 0.1%. This is the smallest increase since 2020, indicating a slowdown in price growth compared to previous years.

Comment: Overall, these figures suggest a relatively stable pricing environment for producers in the US, with only a marginal increase in prices in June. The varying price movements within goods and services categories reflect specific factors impacting those sectors. The year-on-year data indicates a moderation in inflationary pressures compared to previous periods, which may have implications for the overall economic outlook.

Notable Macroeconomic Updates:
Argentina: The monthly inflation rate eased to 6% in June 2023, from 7.8% in May. This is the lowest monthly inflation rate since January 2023. The slowdown in monthly inflation was driven by a number of factors, including softer price increases for food, clothing, and transportation. However, prices for education and communication rose at a faster pace in June. Despite the slowdown in monthly inflation, Argentina's annual inflation rate skyrocketed to 115.6% in June 2023. This is the highest annual inflation rate since 1991.

Comment: The high inflation rate in Argentina is a symptom of the country's economic problems. The economy is struggling with high levels of debt, unemployment, and poverty. These problems are likely to continue to plague Argentina in the near future.