U.S. consumer prices were flat in July versus June as expected, but fell over the past 12 months by the most since 1950, government data showed on Friday.
The Labor Department said its Consumer Price Index was unchanged after rising 0.7 percent in June, in line with market forecasts for a flat reading.
Meanwhile, business inventories fell in the same month.
U.S.business inventories fell by a slightly bigger-than-expected 1.1 percent in June, Commerce Department data showed on Thursday, as companies continued to reduce merchandise amid weak demand.Economists polled by Reuters had expected a 0.9 percent decline, after a 1.2 percent fall in May that was initially reported as a 1 percent drop.
Now, futures are pointing lower after the CPI report. Meanwhile, many world market indices reached 10 month highs. The Hang Seng was up .15%, the Straits Time Index in Singapore was up .66%, and the NIKKEI in Japan was up .76%. In Europe it was a bit more mixed. The FTSE in London and the DAX in German were both up .25%, while the Spanish index was down .35%.
Meanwhile, bonds have responded fairly favorably since the Fed's announcement that they were going to wrap up buying them in large numbers by October. The ten year U.S. Treasury bond is now trading at 3.58%. The yield spread has also tightened between the two and ten year to 2.5%. Meanwhile, crude oil continues to trade above $70 a barrel currently trading at $70.66 a barrel.
The Dollar looks to be trading mostly weaker against the world's currencies. It's down .09% against the Euro, down .13% against the British Pound, and down .66% against the Japanese Yen.
Finally, consumer confidence for the month of July will be coming out momentarily.