March 2011 Jobs Day

March 4, 2011

Investors are looking for U.S. non-farm jobs to have advanced about 200K in February, which which would cap off a week with several encouraging labor market and other U.S. economic indications.  Note that forecasters were overly optimistic in January and December.  The unemployment rate may have ticked back higher but only by a small amount.

Not much else in the way of news or data has been reported overnight.  Investors are still digesting yesterday’s two big surprises, the signal of a probable ECB rate hike next month and the sharp drop in U.S. jobless insurance claims that saw the four-week average decline below 400K for the first time in years.

The kiwi weakened by a further 0.7% against the dollar on the possibility of a rate cut in New Zealand.  The kiwi traded at a 19-year low relative to the Australian dollar this week.

The U.S. dollar is steady against the Canadian dollar and sterling, up 0.3% versus the yen and 0.2% against the Australian currency, and down 0.4% relative to the Swiss franc and Chinese yuan.  The euro ($1.3973) edged up 0.1% and closer to $1.4000.

Equities rose in the Pacific Rim and Europe.  Stocks climbed 1.7% in South Korea, 1.5% in China, 1.2% in Australian and Hong Kong, 1.4% in Indonesia, and 1.0% in Japan and Malaysia.  The German Dax, Paris Cac and British Ftse show gains of 0.9%, 0.7%, and 0.6% so far.

The yields on 10-year British gilts and German bunds fell by five and two basis points, while their Japanese counterpart held steady at 1.30%.

Oil prices rose 0.7% to $102.60 per barrel.  Middle eastern and North African news remains unsettled.  U.S. gasoline prices were marked sharply higher today at the pump.  Gold prices edged up 0.1% to $1417.80 per ounce.

Bank Indonesia left its benchmark interest rate at 6.75% after implementing an initial 25-basis point increase a month ago.

EU leaders are meeting in Finland in continuing search for a plan to address the region’s sovereign debt problems.

The British Halifax house price index slumped 0.9% on month in February, 50% more than forecast.  The 12-month drop widened to 2.8% in December-February from 2.4% in the year to November-January.  Such had been positive until October and up as much as 6.9% in the year to March-May 2010.  British new car sales posted a 7.7% on-year drop in February, smaller than the decreases of 11.5% in January and 18.0% in December.

Germany’s construction purchasing managers index improved to 60.7 in February, the best reading since this series was launched in late 1999, from 55.5 in January and an average score in November-December of 44.9.  Improving weather was a factor.

On-year Spanish industrial output growth improved to 6.0% in January after 0.5% in December and 3.2% in November.

Iceland’s trade surplus of ISK 7.8 billion in January was 32.6% smaller than in December but 49% greater than in January 2010.  The average monthly surplus in 2010 was ISK 9.9 billion.  Exports rose 3.2% on year in January versus a 21.8% increase in calendar 2010.

An acceleration of Filipino CPI inflation to 4.3% in February, a nine-month high, from 3.6% in January and 3.0% in December, has kindled speculation of a possible central bank rate increase at the next policy meeting scheduled for March 24.

Malaysia’s current account surplus of 23.9 billion ringgits last quarter surpassed the third-quarter surplus of MYR 19.9 billion.

Besides the Labor Department February jobs report due at 13:30 GMT, U.S. factory orders are also getting released.  Fed Vice Chairperson Yellen speaks today.  Canada’s IVEY-PMI and Mexican, Brazilian and Colombian price data arrive as well.  Mexican consumer confidence will be reported, and the Bank of Mexico will announce its latest interest rate decision.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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