Trade and interest rate trends persist

The US trade deficit narrowed in June. From Reuters:

The monthly trade gap was $64.8 billion, down slightly from $65.0 billion in May as exports grew more rapidly than imports during the month...

The United States imported a record $20.5 billion worth of crude oil in June...

The United States sucked in a record $185.5 billion in imports of goods and services from all countries in June...

But U.S. exports of goods and services also set a record in June at $120.7 billion...

Exports rose 2.0 percent in June, while imports were up 1.2 percent.

The June data continued the stabilisation in the deficit that started in late 2005. Or as Menzie Chinn says: "Persisting trends, for now."

The Reuters report also mentioned that initial unemployment claims rose 7,000 last week to 319,000.

Japan reported its current account balance for June yesterday. Reuters reports on this and July wholesale prices.

The corporate goods price index (CGPI) rose 3.4 percent in July from the same month a year earlier, BOJ data showed on Thursday...

Compared with a month earlier the CGPI, which tracks trends in wholesale prices of goods, was up 0.7 percent percent in July compared with a median market forecast of a 0.5 percent rise...

The current account surplus fell 7.2 percent in June from the same month a year earlier to 1.0167 trillion yen ($8.79 billion), Finance Ministry data showed...

The trade surplus was down 12.7 percent from a year earlier at 857.0 billion yen, with a surge in import value from high oil prices cutting growth in exports.

Meanwhile, consumer confidence in Japan rose to 48.6 points last month from 47.2 in June according to the Cabinet Office.

The recent data probably mean that the Bank of Japan will leave interest rates unchanged at the end of its policy meeting today.

The European Central Bank, however, appear poised to raise rates further. From Bloomberg:

If the ECB's "assumptions and baseline scenario are confirmed, a progressive withdrawal of monetary accommodation will be warranted," the Frankfurt-based central bank said in its August monthly bulletin published today. Borrowing costs "remain low" even after the ECB raised its benchmark refinancing rate to 3 percent last week, the fourth increase in eight months.

But French industrial production continued Europe's poor run in June.

French industrial production stagnated in June, Paris-based national statistics office Insee said today, as record oil prices and a strengthening euro dimmed prospects for economic growth. The euro's 9 percent gain against the dollar this year, to $1.2866 at 11 a.m. in Frankfurt today, may erode demand for European exports.

One central bank that did take action yesterday was South Korea's. From AFP/CNA:

In a surprise move, South Korea's central Bank of Korea has hiked interest rates in a pre-emptive move to curb inflation, sending stock prices considerably lower and sparking a surge in bond yields.

"The call rate target (for August) was raised from the current 4.25 percent to 4.5 percent," the bank said in a statement.