U.S. Treasuries advanced for a fifth day on Friday, the longest winning run since September, as accommodative comments from the Federal Reserve on its stimulus program boosted demand for the U.S. government securities. The benchmark 10-year yield fell 5 basis points to 2.53% in morning trading, extending its weekly decline to 22 bps, after climbing more than 30 bps in June.
European junk bond issuance rose to a 10-week high, with sales jumping to €3 billion this week from €500 million last week, as corporate credit risk slid to a one-month low. The cost of insuring Europe’s high-yield corporate bonds against default has dropped 32 basis points thus far this week to 423 bps, the lowest since May 31.
High Income Economies…US consumer sentiment fell slightly in July with the University of Michigan confidence index dropping to 83.9 from 84.1. While consumers assessment of current conditions improved slightly, they were less optimistic about the economic outlook, with the gauge of consumer expectations falling to 73.8 from 77.8.
Singapore's economy grew the most in over two years in Q2, helped by a surge in manufacturing. GDP rose by a seasonally adjusted annualized 15.2% (q/q saar) in Q2 following a 1.8% increase in Q1.
Eurozone industrial production declined for the first time in four months, down 0.3 % (m/m sa) in May, reversing April's 0.5% rise, led by a 1.5% fall in capital goods output and a 2.3% drop in durable consumer goods. On a three month basis, overall output grew by 4.6% (3m/3m saar) vs. 3.7% in April.
Developing Economies…Latin America and the Caribbean: Mexico's industrial production slowed in May to 0.5% (y/y), down from 3.3% (y/y) in April, as construction activity and mining slipped, while manufacturing made gains on the thriving auto industry and utilities were flat.
Separately, Mexico’s central bank benchmark interest rate at 4% as inflation cooled to a four-month low of 4.09% (y/y) in June, retreating after a surge in fresh food prices, but still slightly above the policymakers' 4 percent ceiling.
South Asia: India's consumer price inflation increased to 9.9% (y/y) in June, up from 9.3% (y/y) in May. Driving the acceleration in the overall price growth, food and beverages prices climbed 11.8% (y/y) and clothing and footwear prices advanced 9.7% (y/y).
Separately, India’s industrial production contracted by 1.6% (y/y) in May, down from a revised 2.1% (y/y) growth in April led by declines in manufacturing and mining activity.