Major economies reflect mixed data

Economic indicators across the world's major economies continued to reflect a combination of both positive and negative data.

In the US, data was mixed over the week as a whole. The durable goods orders data was stronger than expected, with a second successive 1.8 per cent monthly increase.

In contrast, there was a weaker than expected new home sales figure with a decline to an annual rate of 342,000 in May from 344,000 previously.

The Federal Reserve left benchmark interest rates on hold following the latest FOMC meeting and said rates will stay low for an extended period. The Fed also removed the previous warning that inflation could be undesirably low.

The Eurozone PMI manufacturing indices were firmer, with the flash index rising to 42.4 from 40.7 the previous month. The services sector index edged slightly lower for the month, contrary to expectations of a measured increase.

The future component of the German IFO index rose to 85.9 for June from 84.2 the previous month, maintaining the improvement seen over the past few months. The European Central Bank allocated €442bn in its debut one-year refinancing operation. This was higher than expected which increased speculation that there were still very important stresses within the Eurozone banking sector.

In the UK, retail sales data recorded -17 for June, unchanged from the previous month, while retailers expect a further decline for July. Meanwhile, unemployment rose to 7.2 per cent in April.

The OECD forecasts were mixed as the 2009 GDP projections were revised to show an even sharper contraction while there was an upgrade for the 2010 figure.

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