Optimism Ahead of U.S. Jobs Report

April 4, 2014

The U.S. Labor Department report is eagerly awaited for confirmation that the U.S. shook off its winter doldrums.  Economists have predicted a better 190K advance in nonfarm jobs, but the whisper numbers in the street go as high as 250K in the wake of Wednesday’s ADP private employment estimate.  The jobless rate is seen falling to 6.6% and possibly as low as 6.5%.  A weaker-than-expected report may get shrugged off as the last vestige of the weather-induced slowdown.

The dollar has marked time with not much else happening.  The U.S. currency is unchanged against the yen, yuan and kiwi, up 0.2% versus the Swiss franc and sterling, up 0.1% relative to the euro and down 0.1% against the loonie and Australian dollar.

Share prices in the Pacific Rim rose 1.0% in China but fell by 0.7% in India, Indonesia, and Singapore, 0.3% in South Korea, 0.2% in Taiwan and 0.1% in Japan.  Australian equities firmed 0.2%, and European markets are up 0.5% in Britain, 0.4% in Germany, and 0.3% in France.

The 10-year Japanese JGB and British gilt yields rose by two and one basis points, while German bunds held steady.  Following dovish comments yesterday by ECB President Draghi, euro area 10-year sovereign debt premiums vis-a-vis German bunds narrowed further.  The Spanish spread is the smallest in 42 months.

Oil and gold climbed by 0.7% to $100.96 per barrel and 0.5% to $1,290.50 per ounce.

German industrial orders rose 0.6% in February, beating analyst expectations, after a 0.1% uptick in January.  Domestic demand went up by 1.2%, including a 1.4% jump in domestic demand for capital goods.  Export orders only recovered 0.2% following a 1.3% decline in January.  Total orders in the first two months of 2014 were on average 0.7% greater than the 4Q13 mean.

Euroland’s retail purchasing managers index reflected a slower rate of contraction in March, printing at 49.2 after 48.5 in February and an isolated above-50 score of 50.5 in January.  The retail sector continues to trail activity in manufacturing and services.  Germany’s retail PMI dropped 1.9 points to 50.2, while the French and Italian retail PMIs rose 1.6 points to 50.0 and 3.4 points to a 37-month high of 46.5.

J.P. Morgan’s compilations of the global composite purchasing managers index rose 0.4 points to 53.5 in March.  The world PMI for services improved 0.8 points to 53.5.

Germany’s construction purchasing managers index fell 1.1 points to 52.5 in March, which happened to be the January reading as well.  The index average score in the final quarter of 2013 was 52.8.

The Halifax index of British house prices unexpectedly fell by 1.1% in March but posted an on-year advance of 8.7% in the first quarter.  British car registrations, a gauge of sales, increased 17.7% on year in March and by 13.7% in the first quarter.

Swedish industrial production easily outperformed analyst forecasts with a rebound of 2.2% in February.  The 12-month rate of rise was just 1.7%.  Industrial orders went up 3.1% on month but fell by 1.2% on year.  Irish industrial output was 5.3% greater in January than a year earlier.

Czech retail sales in February exceeded the year-earlier level by 8.1%.  Greek retail sales volume posted a 1.9% on-year decline in January.

Filipino consumer price inflation slowed to 3.9% last month from 4.1% in February, and the core rate dropped 0.2 percentage points to 2.8%. 

Like the United States, Canada will be releasing labor statistics at 12:30 GMT today.  The Canadian IVEY-PMI index also gets reported.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

Tags: , ,


Comments are closed.