Flood of Data on Final Business Day of April

April 28, 2017

The dollar is mixed, with declines of 0.6% against the euro, 0.3% relative to the peso and Swiss franc and 0.2% vis-a-vis sterling but gains of 0.3% versus the yen, 0.2% against the kiwi and 0.1% relative to the loonie. The Aussie dollar and Chinese yuan are unchanged.

Stocks are generally lower. The German bund and British gilt yields rose.

Commodity prices including gold and oil advanced overnight.

A parade of data releases began in Japan with industrial production, consumer prices, auto output, retail sales, labor statistics, household spending, housing starts and construction orders.

  • Japanese industrial output fell 2.1% in March, trimming the quarter-on-quarter rise to 0.1%. Production still surpassed the 1Q16 level by 3.8%, however, versus a 0.1% calendar year dip in 2016.
  • Core CPI inflation held steady at 0.2% in March, but the CPI excluding energy as well as fresh food swung to a 12-month dip of 0.1% from a 0.1% uptick in the year to February.
  • In the year to March, motor vehicle output climbed 4.7%. Jobs grew 1.1%. Retail sales climbed 2.1%. Real household spending and disposable income fell 1.3% and 2.0%, respectively. Housing starts edged up just 0.2%, and the 12-month increase in construction orders dropped to 1.1% from 5.7% in February.
  • The Japanese jobless rate stayed at a cyclical low of 2.8% in March. The ratio of job offers to seekers rose further to 1.45.

European Data Releases Today:

  • Harmonized euro area CPI inflation recovered to 1.9% in April after falling to 1.5% in March from 2.0% in February. While this was only a slightly bigger rebound than expected, the big news was the acceleration of core CPI to 1.2% from 0.7%. The ECB has been looking through the spike in total inflation because of the continuing weakness of core up to now.
  • Euroland money and credit growth accelerated in March. M3 money registered an on-year advance of 5.3%, up from 4.7%. M1 jumped 9.1% versus 8.4% the month before. Private credit expansion accelerated to 3.2% from 2.6%.
  • German retail sales volume edged up just 0.1% in March and was 0.2% softer in the first quarter than the final quarter of 2016.
  • German import prices fell back 0.5% on month in March, slicing its 12-month increase to 6.1% from 7.4%.
  • British GDP growth of only 0.3% last quarter decelerated even more than assumed. That was the smallest quarterly increase in a year and left GDP 2.1% above its year-earlier level. The deceleration in GDP was concentrated in service sector activity.
  • British consumer confidence printed at -7 in April, a point weaker than in March. Such has ranged between -5 and -8 since November. The British Bankers Association reported 41,061 mortgage approvals in March, the lowest total since November.
  • French GDP rose 0.4% on quarter in 1Q17 and 0.8% on year. French PPI inflation slowed to 2.9% in March from 3.9% the month before. French consumer spending unexpectedly declined last month, falling 0.4% after a 0.8% slide in February.
  • Italian CPI inflation accelerated to 1.8% in April, led by a 5.7% rise in energy prices. Italy’s PPI in March had a 3.1% 12-month increase.
  • Spanish GDP growth slowed to a one-year low of 0.3% in 1Q17, but the on-year pace stayed at 3.0%. Austrian GDP rose 0.6% last quarter and 2.0% from a year earlier.
  • Greek and Hungarian producer prices were 7.7% and 4.2% higher than a year earlier in March. In the same interval, the PPI of Cyprus rose 4.9%, but that of Iceland dropped 7.1%.
  • Norwegian, Irish, Spanish, and Swedish retail sales were 2.5%, 3.2%, 0.9% and 1.9% greater than a year earlier in March.
  • Switzerland’s index of leading economic indicators declined 1.1% in April.

United States and Canada:

  • U.S. real GDP grew just 0.7% at a seasonally adjusted annual rate last quarter, the weakest pace since the last GDP quarterly contraction registered three years earlier. ┬áPersonal consumption went up only 0.3%, government spending declined 1.7%, and inventories exerted a 0.9 percentage point drag on the quarterly GDP growth rate. Core inflation according to the core personal expenditure price deflator was 1.7% for a third straight quarter.
  • The U.S. employee cost index rose 0.8% on quarter and 2.2% on year last quarter. These increases were higher than in the final quarter of 2016. Wages and benefits each picked up further.
  • After expanding 0.6% in January, Canadian monthly real GDP stagnated in February. Industrial production dropped 0.4% after jumping 1.4% in January.
  • Canadian producer prices advanced 0.8% in March, lifting the 12-month increase to 5.1% from 3.5%.

In central bank action today, the Bank of Russia cut its key interest rate to 9.25% from 9.75%. Analysts were expecting only a 25-basis point reduction as was done at the mid-March meeting.

Still ahead: the Chicago PMI, the U. Michigan consumer sentiment index, and the result of today’s Colombian central bank meeting.

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

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