New motor vehicle sales fell 3.5% in July, almost completely wiping out June's downwardly revised 3.6% increase (previously reported as a 4.0% rise).
However, new motor vehicle sales remain at elevated levels, with average monthly car sales for 2013 so far above that of previous years. For the year to July, new motor vehicle sales rose 3.0%, down from a 6.9% increase in the year to June (previously reported as 7.1%).
Equity markets were softer overnight despite little fresh data. Fears of the US pulling back from its bond purchasing program on each hint of good economic news continues to plague the market.
In Germany, the Bundesbank commented that the European Central Bank's forward guidance on low interest rates was "not an unconditional commitment".
These comments added to concerns that global bond yields will rise further in due course. The Dax was down 0.3% and the FTSE fell 0.5%. In the US, the Dow was down 0.5% and the S&P500 fell 0.6%.
US long bond yields pushed to fresh two-year highs and are now moving close to 3.0%. Little wonder the US equity market is repricing itself on the downside.
In Australia, ten year bond yields pushed back above 4.0% having been close to 3.0% in early May.
The euro lifted against the other majors and against the AUD on the back of the comments from the Bundesbank. The AUD was also weaker against the USD despite a dearth of data.
Firming US bond yields appear to be attracting funds back to the USD.
After recent rises, profit taking took hold in oil markets spurred on by supply concerns due to ongoing unrest in Egypt. Copper also retraced some of its recent gains as did gold.
At its July meeting, the ECB committed to keep interest rates at record lows for an "extended period". Last night, the Bundesbank noted that the phrase 'extended period' may not be as long as some were expecting.
Following strong German growth in the second quarter, the Bundesbank expects ongoing German economic growth through the remainder of 2013.
The Japanese trade deficit was wider than expected, rising to ¥1024.0bn in July, from a deficit of ¥182.3bn in June. This was Japan's third biggest trade deficit on record since 1979.
Growth in imports was stronger than expected, rising 19.6% in the year to July, up from 11.8% in the year to June. Meanwhile exports rose 12.2% in the year to July, up from 7.4% in the year to June.
This was the strongest annual growth in exports since 2010.
Producer input prices rose 0.6% in Q2, while producer output prices increased 1.0%. For the year to the second quarter, producer input prices were unchanged, while producer output prices rose 0.8%.
UK house prices fell 1.8% in August according to the Rightmove index of asking prices. The annual pace accelerated from 4.8% to 5.5%, its fastest since early 2010.
No data released. Markets appear to be looking forward to the release of the minutes of the Fed's July meeting due in two days time.
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