Week Ahead: Watch Yellen, Inflation, and Retail Sales

Posted July 12, 2017

Key events later this week include the appearance by Yellen, who will update lawmakers on the outlook for the USA economy and her expectations for additional interest rate increases in her twice-annual appearance before congressional committees.

Germany's 10-year rate closed at its highest level since the end of 2015, up 1 bp to 0.57%, while French, Italian and Spanish 10-year rates were up in the order of 2-8 bps.

Perceptions that an era of ultra-cheap money is gradually ending have been reinforced by European Central Bank minutes showing policymakers are open to reducing monetary stimulus.

Japanese stocks ended higher Tuesday as investors waited for fresh clues on the global economy and USA central bank policy with Federal Reserve boss Janet Yellen's testimony later in the week in focus. Yellen testifies before a House panel on Wednesday, and moves to the Senate on Thursday.

The dollar index, which tracks the greenback against a basket of six major rivals, added 0.2 percent to 96.163 ahead of Yellen's semi-annual monetary policy testimony before Congress on Wednesday and Thursday. The Kospi in South Korea climbed 0.6 percent to 2,396.00 while Australia's S&P ASX 200 edged 0.1 percent higher to 5,728.90.

The productivity slowdown, found not just in the US but also other advanced economies, reflects a combination of factors, perhaps a "productive pause" as firms retool to incorporate new technology as well as a postrecession decline in research-and-development investment that has started to reverse. The Shanghai Composite index yoyo'd and eventually ended the day down 0.3 percent at 3,203.04, while shares in Southeast Asia were mixed.

Index heavyweights Singapore Telecommunications and Jardine Matheson Holdings were among the top decliners on the index, falling as much as 1 percent and 1.5 percent, respectively.

ENERGY BOOST: Energy sector companies led the gainers.

Wells Fargo and Bank of America each lost 1 percent Tuesday.

METALS: Gold rose $1.50 to $1,214.70 an ounce. Benchmark U.S. crude picked up 64 cents, or 1.4 percent, to settle at $45.04 a barrel on the New York Mercantile Exchange. The euro slipped to $1.1395 from $1.1400.

Elsewhere, silver gained 0.4 percent to $15.69 an ounce, palladium ceded 0.3 percent to $836.99 and platinum slid 0.5 percent to $895.7.

Seoul added 0.6 percent, with Taipei more than one percent up and Wellington 0.6 percent higher.