Easter Week Continues

April 3, 2012

The Easter holidays later this week are the second biggest interruption of currency trading in the calendar year.  Before that time is upon us, however, there will be some central bank policy events, PMI data, and U.S. labor market figures for investors to digest.

Overnight, the dollar rose 0.5% against the Australian dollar.  The Reserve Bank of Australia’s Official Cash Rate was left unchanged at 4.25%, but a statement released by the central bank did nothing to dissuade market expectations of a rate cut in May.  FOMC minutes from the March meeting will be released today.

The dollar otherwise shows little change, firming 0.2% against the kiwi and sterling and by 0.1% relative to the loonie, holding steady versus the yen, and dipping 0.1% against the euro, Swissie, and yuan.

Share prices fell 0.6% in Japan and are down by 0.4% in Paris, 0.2% in London and 0.1% in Frankfurt.  Earlier in the Pacific Rim, equities rose 1.0% in South Korea, 0.5% in China, 1.2% in Indonesia, and 1.0% in Thailand but fell by 1.3% in Taiwan, 1.1% in The Philippines, and 0.6% in New Zealand.

Yields on 10-year German bunds and Japanese JGBs firmed two basis points each, while British gilts are unchanged.

Oil prices dropped 0.7% to $104.54 per barrel.  Gold edged 0.1% lower to $1678.60 per ounce.

A 1.2% increase in energy producer prices in the euro area lifted the overall PPI index by 0.6% in February.  Energy had risen 2.3% on month in January.  Non-energy producer prices climbed 0.3% in January and 0.4% in February.  On-year PPI inflation was 3.6% in February, down from 5.8% last September.

Growth in Japan’s monetary base slumped sharply to a 12-month drop of 0.2% in March from +11.3% in February and 16.6% in 4Q11.  Growth in current account balances at the Bank of Japan fell 3.6% in the year to March versus an on-year rise of 52.8% in February.

Japanese labor cash earnings growth accelerated to a 9-month high of 0.7% in March.

Governor Zhou of the People’s Bank of China reaffirmed that containing inflation remains the top monetary policy priority.  China’s non-manufacturing purchasing managers index touched a 6-month high in March.

J.P. Morgan’s global manufacturing PMI index for March was reported at 51.1, a tenth of a point lower than in February and down from 51.3 in January.

The Saudi non-oil PMI fell a full point to 58.6 and was 1.4 points below January’s peak of 60.0.  The purchasing managers index of the United Arab Emirates edged up 0.3 points to 52.3 last month.

Britain’s construction purchasing managers index benefited from favorable weather and climbed 2.4 points to a 21-month high of 56.7 in March.  Such has been at the no-change 50 line or higher since the beginning of 2011.  The orders sub-index touched a 4-1/2 year high in March.

Turkish PPI inflation slowed to 8.2% in March from 9.2% in February, but CPI inflation remained excessive at 10.4% last month.

In Thailand, CPI inflation held at 3.4% last month, and PPI inflation of 1.8% was also unchanged from February’s pace.

Australian retail sales firmed by weak but as-expected 0.2% in February, trimming the 12-month increase to 1.9% from 2.7%.

Romanian PPI inflation ticked down a tenth point to 5.9% in February.

Spanish unemployment rose another 39K last month.  Spain has Euroland’s most elevated jobless rate.  Spain’s finance minister called the budgetary circumstances critical.

Business sentiment in South Africa fell by 3.8 points to a reading of 95.7 in March.  Auto sales rose 4.8% in the year to March, down from a 6.4% on-year increase in February.

Aside from the much awaited FOMC minutes, investors will get U.S. data today for auto sales, factory orders, and weekly chain store sales and oil inventories.

Republican Party presidential primaries are scheduled today in Wisconsin, the District of Columbia, and Maryland.

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



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