Crude and machismo

Daily update

Oil futures prices have been largely indifferent to the weekend’s events in the Gulf and Russia. Investors managed to contain their surprise at Iran and the US trading military strikes. US policy has been highly volatile in several areas over the past 18 months, preparing investors for instability in implementing the Versailles memorandum. Russian President Putin’s admission that Ukrainian drone strikes might force Russia to import more fuel is unlikely to change global demand dramatically (reserves are being used for now).
Japan’s May retail sales data showed local consumers mirroring the resilience of their developed economy peers. The data (unfortunately not inflation adjusted) was stronger than expected, with positive revisions. Regulatory changes may have prompted some demand (buying before products were banned), and subsidies have helped support spending power.
Spanish June preliminary consumer price inflation hints at the absence of lurking inflation pressures in the euro area (in spite of the ECB’s fantasies). Spain has some peculiarities—with people reluctant to holiday near war zones more people have been visiting Spain, for longer, spending more money. That supports demand (and potentially prices) in areas like restaurants.
UK credit data is due—but the UK consumer has been varying savings more than borrowing money to sustain the spending behavior.