Uneasiness about Europe on a Light Data Release Day

March 19, 2012

Share prices are lower in Europe, with drops of 0.6% in Paris and 0.4% in London and Frankfurt.  In the Pacific Basin, equities fell by 1.2% in India, 1.0% in Pakistan and Hong Kong, 0.7% in Singapore, and 0.5% in New Zealand.  Stocks edged up 0.6% in South Korea, 0.3% in Australian and 0.1% in Japan.

yields on ten-year British gilts, German bunds and Japanese JGBs slid back five, three and one basis points.

The yen firmed 0.3% against the dollar, whose movement otherwise has been limited to gains of 0.1% against the euro, Swissie and loonie and a dip of 0.1% versus the kiwi.  The greenback is unchanged from Friday’s closing levels against sterling, the Australian dollar and the Chinese yuan.

Gold is unchanged, too, at $1656.50 per ounce, while oil had slipped 0.3% to $106.71 per barrel.

Construction output in the euro area fell by 0.8% in January after a 1.9% tumble in December.  Production fell 1.4% last quarter and was also 1.4% lower in January from both January 2011 and the 4Q11 average level.  Again, Germany has far outperformed other countries in the region.  Construction in Germany was 6.5% greater than a year earlier, whereas construction in Spain, Italy, and France posted on-year declines of 11.5%, 10.9%, and 0.5%.

Euroland’s seasonally adjusted current account recorded a surplus of EUR 4.5 billion in January after a surplus of EUR 3.4 billion in December.  A seasonally unadjusted deficit of EUR 21.8 billion in the year to January was less than half as big as the EUR 48.6 billion in the previous twelve months.  Euroland’s Basic Balance — the sum of the current account, direct investment and portfolio investment — was EUR 167 billion in surplus over the latest twelve reported months compared to a tiny surplus of EUR 6.1 billion in the prior twelve months.

Britain’s Rightmove house price index scored a third consecutive monthly advance, rising 1.6% in February and 2.2% from a year earlier.

Italian industrial orders plunged 7.4% in January and by 5.6% from a year earlier.  The Dutch current account surplus of EUR 18.2 billion last quarter was 54% wider than in 3Q11.

In Asia, Chinese property values continued to soften, falling last month in 64% of all reporting urban areas.  South Korean department store sales were 2.9% higher than a year before in February.  Hong Kong’s jobless rate rose to 3.4% last month from 3.2% in January.

Reserve Bank of Australia Governor Glenn Stevens made dovish policy remarks, suggesting that credit policy can help promote growth in the period ahead so long as inflation remains consistent with its target.

Consumer confidence in New Zealand posted a higher 102.4 reading in the first quarter, 1.1% above the 4Q11 level.  New Zealand’s services PMI improved 1.7 points to a reading of 55.5 last month.  South Africa’s current account deficit narrowed 10.4% on quarter to 98.8 billion rand in the fourth quarter of 2011.

The National Association of Home Builders index is the only U.S. economic release scheduled today.  New York Fed President Dudley speaks publicly today, and Canada will be reporting wholesale sales.

Copyright 2012, Larry Greenberg.  No secondary distribution without express permission.

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