Activity Blunted by Easter Monday Observances

April 1, 2013

Most European markets remain closed, as well as those in Australia, New Zealand, Hong Kong, Thailand and Canada.

The Tankan corporate survey compiled by the Bank of Japan showed somewhat less improvement than anticipated.  The yen is 0.5% higher, and Japanese stocks sank 2.1%.  The 10-year Japanese JGB yield firmed two basis points to 0.57%.  Japan’s Prime Minister Aso stressed the importance that a higher 2% inflation target raise growth as well as inflation.

The dollar otherwise is unchanged against the euro, yuan, loonie and sterling.  The greenback has firmed 0.1% against the Swiss franc but dipped that amount versus the Australian and New Zealand currencies.

The price of gold edged up 0.2% to $1,599.30 per ounce.  WTI oil fell by 0.6% to $96.64 per barrel.

The euro got as low as $1.2771 overnight amid rumors that big depositors at a couple of Cypriot banks may take a larger loss than thought initially.

Some highlights of the Tankan quarterly survey are

  • The diffusion index (DI) of big manufacturiers remained weak at minus 8 after minus 12 in December.  Analysts were hoping for a minus 2 score.  Survey participants look for the reading in June to improve to minus 1.
  • The DI for small manufacturers was minus 19, a point worse than in December.
  • The DI for large non-manufacturers of +6 was two points better than in December but about 5 points lower than analysts were forecasting.  As in manufacturing, companies anticipate further improvement during the second quarter.
  • The DI of small non-manufacturers rose three points to minus 8.  The DI for all participating firms went up just a single point to reading of minus 8.
  • All large firms plan a 2.0% contraction of investment spending in the coming fiscal year.  The drop for all firms, large and small, is seen at 3.9%.
  • Respondents expect better profits but continuing soft sales.

Japanese motor vehicle sales sank 15.6% between March 2012 and March 2013.  Sales dropped 9.4% in the quarter, depressed by the removal of subsidies.

The March purchasing manager surveys in manufacturing were released for a limited number of economies.  More of these arrive tomorrow.

  • For China, the HSBC PMI reading of 51.6 was 0.1 points lower than the flash preliminary score but 1.2 points better than February’s reading.  The government-authorized CFLP PMI improved also, scoring a 50.9 after 50.1 in February.  This was the sixth straight reading of at least 50, a sign of moderate recovery.
  • Taiwan’s PMI rose to a two-month high of 51.2 from 50.2 in February and 51.5 in January.  Orders exceeded 50 for a fourth consecutive time.
  • Vietnam’s PMI climbed 2.5 points to a 23-month high of 50.8.  Inflation touched a 6-month peak.
  • In Indonesia’s case, the PMI climbed 0.8 points to 51.3, with orders touching a 4-month high.
  • Russia’s 50.8 reading was at a 3-month low, signifying lessening momentum.
  • India’s 52.0 reading after 54.2 in February was a 16-month low.
  • Turkey’s 52.3 reading was at a 4-month low and followed 53.5 in February and 54.0 in January.
  • The Greek PMI declined 0.9 points to a two-month low of 42.1.  Input price inflation sank to a 40-month low.

Consumer prices in South Korea slid 0.2% on month in March and slowed to a 12-month increase of 1.3% from 1.4% in February.  South Korea’s $3.4 billion trade surplus in March was 68% wider than in February.

Thai producer prices declined 0.3% both on month and on year in March.  CPI inflation decelerated to 2.7% from 3.2%.  House prices in Singapore (+0.5%) posted their smallest increase in the first quarter since the second quarter of last year.

Indonesia recorded a $330 million trade deficit in February after a shortfall of less than $100 million in January.  Indonesian CPI inflation rose to 5.9% last month from 5.3% in February. 

Turkish GDP advanced 1.4% last quarter.  Growth of 2.2% in 2012 was about a quarter as much as in 2011.

The U.S. manufacturing purchasing manager survey results and construction spending data arrive later today.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

Tags: , ,


Comments are closed.