United States inflation flat in June while retail sales sink

An aging population and lagging population will make it hard for the US to hit Donald Trump's growth target according to Janet Yellen

A report released Tuesday by the EIA showed US crude production rose by 59,000 barrels to 9.397 million barrels a day in the week ended July 7, which was the highest level in nearly two years. While CPI may not be the Fed's preferred measure of inflation, it is released earlier and identifies whether prices are ticking higher or remain subdued.

Grocery prices have actually declined in the past year, but the cost of takeout and eating out has risen sharply, perhaps reflecting the impact of minimum wage increases in many states. The gap between Canada's 2-year yield and its US equivalent narrowed by 1.2 basis points to a spread of -14.4 basis points, its narrowest since August 18.The narrower spread comes after the Bank of Canada raised interest rates on Wednesday for the first time in seven years.

In a report, the U.S. Commerce Department said that consumer prices was unchanged in June from a month earlier, compared to forecasts for 0.1% increase and a 0.1% drop in the prior month.

Against the Japanese yen, the greenback was down 0.62 percent to 112.57 yen, after hitting a near two-week low of 112.28 yen.

LONDON, July 14 (Reuters) - Global stocks scaled record highs on Friday, capping their best week in over two months as the dollar stayed close to nine-month lows, with bets on a gradual U.S. Federal Reserve rate hike path and hopes for a strong earnings season boosting risk appetite. Should we see the latter today, as expected, and it be accompanied by uninspiring spending data, it will only harden people's belief's that the Fed should hold off on the next hike until next year and could therefore weigh further on the dollar and Treasury yields. Weak auto sales, which have been down in the first half of 2017, were not to blame this time: excluding that volatile category, sales were still down 0.2 percent. The pair finished Thursday's trading at 1.2938. Instead, it stayed flat, and the inflation rate over the past 12 months moved further away from the Fed's 2% target, falling to 1.6% from 1.9% in May.

"After their June rate hike, the Fed is seen watching inflation trends carefully before tightening policy again".

Royal Mail RMG.L shares fell 2.4 percent after it replaced its pension plan, giving employees a choice between defined benefit or contribution pension scheme after opposition from trade unions.

Chinese steelmakers including Baotou Steel and Baoshan Iron & Steel Co. dropped more than 1 percent after U.S. President Donald Trump said he is considering quotas and tariffs to deal with steel dumping from China and others. The German 10-year yield fell as much as 4 basis points to 0.49 per cent, before paring declines to about 0.53 per cent at the end of day.

The dollar index fell 0.4 per cent against a basket of currencies, while the euro gained 0.39 per cent to $1.144. The contract finished the week up 1.5 percent, its first gain in six weeks.

Brent crude futures, the global benchmark for oil, settled up 49 cents, or 1.01 percent, at $48.91 per barrel.U.S.

But industrial production rose 0.4%, just above expectations, with May revised up to a slim gain, the Federal Reserve reported. West Texas Intermediate (WTI) crude futures settled up 46 cents, or 1 percent, at $46.54 per barrel.

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