Senegal's GDP Expands 6.4% in Q1 Financial Markets Global equities, and government bond yields climbed on Friday as investors’ risk aversion eased on subsiding Brexit fears. Asian shares saw modest gains overnight with Japan’s Nikkei index gaining 1.1 percent, while European shares advanced more than 1 percent. Emerging-market shares also posted gains but U.S. equities opened slightly lower. Benchmark 10-year U.S. Treasury note yields rose for the first time since June 6 to 1.608 percent. Yields on 10-year German bond yields clawed back up to the zero. The dollar weakened against its main counterparts as concerns of a British exit from the European Union somewhat abated. The U.K. pound strengthened to $1.4279 Friday morning and the euro rose to $1.1282. The greenback also gave up its early gains versus the yen, as the effect of Japanese officials’ comments on potential currency intervention faded. Advanced Markets U.S. housing starts fell 0.3 percent (m/m) in May to an annualized rate of 1.16 million from 1.17 million in April, dragged down by a drop in multi-family homes and slowdown in single-family homes, the Commerce Department reported. The starts came in better than the economists’ forecast of 1.15 million. Meanwhile, building permits (an indicator of future construction pace) edged up 0.7 percent (m/m) in May to an annualized rate of 1.14 million, from an upwardly revised 1.13 million, and below the economists’ forecast of 1.15 million increase. The slow steady improvement suggests a possible rebound of the housing sector. Canada's inflation rate eased to 1.5 percent (y/y) in May, from 1.7 percent in April. The figure came in below the markets expectation of 1.6 percent rise, with food prices rising at a slower pace, while gasoline prices dropped at an accelerated pace. On a monthly basis, consumer prices increased 0.4 percent, compared to an increase of 0.3 percent in April and below the markets expectation of a 0.5 percent gain, partly due to a jump in transport and recreation prices. Excluding the volatile energy and food prices, annual core inflation rate retreated to 2.1 percent in May, down slightly from 2.2 percent in April and in line with the market expectation, but still above Bank of Canada’s inflation target of 2 percent for three straight months. The Euro Area hourly labor costs rose 1.7 percent (y/y) in Q1, the fastest increase since Q4 2014, following a 1.3 percent rise in Q4 2015. The upturn in the labor costs was driven by a rise in wages and salaries, according to Eurostat. By sector, hourly labor costs accelerated in industry, services, and non- business economy. The highest annual labor costs increases were registered in Estonia, Lithuania, and Latvia, followed by Germany, while costs dropped in Italy. Emerging and Developing Economies Europe and Central Asia 1 Russian producer prices gained 3.2 percent (y/y) in May, after a 0.9 percent climb in April. Prices in the manufacturing industry rose 4.2 percent and electricity, gas and water supply went up 6.1 percent while in mining fell 1.1 percent. On a monthly basis, factory gate prices grew 1.0 percent. Middle East and North Africa Reaching the highest since June 2014, inflation in Oman was 1.1 percent (y/y) in May, unchanged from April. Prices rose for transport, clothing and footwear, housing and utilities, and for furniture and housing materials. In contrast, the cost was lower for food and non-alcoholic beverages and communications. On a monthly basis, prices were nearly steady. Sub-Saharan Africa The Senegalese economy grew 6.4 percent (y/y) in Q1, following a 9.9 percent expansion in Q4. The main contributors to the growth were agriculture, fishing, mining, building and civil engineering, transport, trade and post and telecommunication. June 17, 2016 The Global Daily is an informal briefing on global economic and financial developments compiled by the World Bank’s Development Economics Prospects Group. Recent issues, together with analysis of a variety of macroeconomic topics, covered by the Group, may be found at: http://www.worldbank.org/prospects. The views expressed in the Global Daily do not necessarily reflect those of The World Bank Group, its Board of Executive Directors, or the governments they represent. Feedback and requests to be added to or dropped from the distribution list may be sent to: Derek Chen (dchen2@worldbank.org). 2