Several Data Surprises

April 5, 2017

ADP reported a resurgence of private jobs in the United States, which they estimate climbed 263K in March. The Labor Department monthly report arrives Friday.

But the U.S. non-manufacturing purchasing managers index compiled by the ISM fell back 2.4  points to 55.2, with business activity retreating 4.7 points to a reading of 58.9. Likewise, a services PMI compiled by Markit Economics for the U.S. dropped to a 6-month low of 52.6 in March versus 53.8 in February and a 14-month high in January of 55.6.

New opinion  polls show a further erosion of voter support for President Trump. Voters were surveyed before the chemical war attack in Syria. Atlanta Fed President Lacker resigned ahead of the expiration of his term as news broke that he’d broken protocol five years ago regarding the confidentiality of FOMC discussions. FOMC minutes from the March meeting that raised the federal funds rate will be released at 18:00 GMT today.

President Zuma of South Africa won a vote of confidence from lawmakers prompted by his recent cabinet shakeup. The rand fell in response.

Central banks in Poland and Romania left their key interest rates unchanged at 1.5% and 1.75%, respectively.

The dollar has fallen today by 0.6% against the peso and 0.4% relative to sterling. It has appreciated, on the other hand, by 0.4% against the yen, 0.3% versus the kiwi, 0.2% vis-a-vis the euro and Swiss franc and 0.1% against the loonie and yuan.

Markets reopened in China, Taiwan, and Hong Kong following Ching Ming Festival observances. Share prices in those economies climbed 1.5%, 1.4% and 0.8%. Japan’s Nikkei fell 0.3%, in contrast. In other continents, the DOW is up 0.8%, and equities have gained 0.9% in Spain, 0.7% in Greece, 0.6% in Italy, 0.5% in the U.K., and 0.4% in France.

10-year sovereign debt yields are unchanged in the U.S. and Japan but 0.3% in the U.K. and up a basis point in Germany.

WTI crude oil jumped 1.6% to $51.86 per barrel. Comex gold fell 0.7% to $1,249.20 per ounce.

British unit labor costs in the final quarter of 2016 fell 0.4% from the prior quarter and decelerated to an on-year 2.1% advance, lowest since 1Q16, from 2.5% in last year’s two middle quarters.Shop prices were 0.8% lower than a year earlier in March, similar to February’s 1% decline.

In the year to March, Filipino consumer and producer prices respectively advanced by 3.4% and 2.2%.

A bunch more purchasing manager survey results from March were published.

  • Euroland’s services PMI rose 0.5 points to a 70-month high of 56.0. The Ezone composite PMI rose to a 71-month high of 56.4. Inflation continues to pick up as well.
  • Germany led Euroland, with composite and services PMI scores that were the best in 70 months and 15 months. German GDP likely expanded 0.6% last quarter.
  • Japanese service and composite PMI readings of 52.9 were each the best in 19 months.
  • Britain’s services PMI swung from a 5-month low of 53.3 in February to a 5-month high of 55.0 in March, buoying sterling and giving some relief after a string of weaker-than-assumed data.
  • Russia’s services and composite PMIs rebounded to 2-month highs of 56.6 and 56.3.
  • Australia’s Performance of Services index rebounded 2.7 points to a 2-month high 51.7.
  • Brazil’s composite PMI improved 2.1 points to a 25-month high of 48.7. Being less than 50, this still means that activity is still shrinking but a a slower pace.
  • Taiwan’s manufacturing PMI rose to a 3-month high of 56.2 in March from 54.5 in February.
  • Singapore’s private sector PMI rose to a 3-month high as well of 52.2.
  • Standard Bank reported a 2-month private South African PMI reading of 50.7, up marginally from February’s four-month low of 50.5.

Trump meets Chinese President Xi Jinping tomorrow. BOJ Governor Kuroda in parliamentary testimony declined to comment on what constitutes an appropriate level in the yen.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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