Lower Share Prices
March 29, 2011
Stocks are down 0.8% in Germany, 0.6% in France, and 0.3% in Britain. Earlier, equity markets lost 1.0% in China, 0.3% in Indonesia, and 0.2% in Japan but climbed 0.9% in India, 0.8% in South Korea and 0.5% in Australia.
The dollar rose 0.3% against the yen and Swiss franc, a sign of greater risk aversion, 0.2% relative to the Aussie dollar, and 0.1% versus sterling. The greenback eased 0.1% against the yuan and Canadian dollar and is unchanged on balance against the euro after an early uptick.
The yields on 10-year sovereign Japanese, British and German debt respectively are down a basis point, unchanged and up a basis point.
Oil and gold prices eased by 0.7% and 0.6% to $103.22 per barrel and $1421.30 per ounce.
A couple of Spanish savings banks are requesting government aid in the latest sign of continuing debt strains in Euroland’s peripheral members.
President Obama’s defense on humanitarian grounds of military action in Libya does not seem to have affected markets.
Attention remains riveted upon Japan’s nuclear reactor, where the outlook for containment remains uncertain. Unilateral intervention to keep the yen weaker than 80/USD continues, but Sakakibara, a former top official at the Ministry of Finance, opined overnight that he expected only very limited concerted intervention and that 78-79/USD would be manageable.
St. Louis Fed President Bullard made hawkish comments that unwinding of monetary stimulus could begin this year before all uncertainty is removed.
The final British 4Q10 GDP estimate was released, showing negative growth of 0.5% last quarter, an on-year 1.5% rise of GDP, and an acceleration of the GDP price deflator to an on-year pace of 2.7% from 2.5%. In 4Q, consumption and investment recorded non-annualized drops of 0.3% and 1.8%. Net exports exerted a drag of 1.3 percentage points on economic growth. The U.K. current account deficit widened 21% on quarter to GBP 10.5 billion (2.9% of GDP) from 2.4% of GDP in 3Q, 2.5% of GDP in 2010 and 1.7% of GDP in 2009.
British mortgage approvals rose to 46.97K last month, a bit more than forecast, from GBP 46.15K in January, and consumer credit growth of GBP 0.8 billion showed a return to positive territory after a dropping in January. However, net mortgage lending fell over 30% to GBP 1.2 billion, and M4 money was 1.5% lower in February than a year earlier.
German consumer confidence edged down to 5.9 in April from 6.0 in March. Four of five reporting German states experienced a 0.5% increase of consumer prices in March, suggesting that on-year inflation probably held steady instead of rising as forecast. Germany’s CPI was 2.0% higher than a year before in February.
The UBS gauge of Swiss consumption fell for a second straight time, printing at 1.46 in February versus 1.66 in January. Irish producer prices slid 0.2% on month in February. Greek producer prices were 8.5% higher than a year earlier in February, accelerating from a 7.3% gain in the year to January. Icelandic consumer price inflation rose to 2.3% in March from 1.9% in February.
Italian business sentiment advanced 0.8 points to 108.3 in March, the best reading in three years. Hungarian unemployment of 11.5% in the three months to February exceeded expectations.
French consumer spending on manufactured goods jumped 0.9% on month and posted a 5.5% 12-month advance after 2.4% in the year to January.
Japanese unemployment fell sharply for a one-month change, printing at 4.6% in February after 4.9% in the prior two months. Jobs were 0.6% higher than a year before. The job offers ratio crept upward to 0.62 from 0.61 in the prior month and 0.57 at the end of 2010.
In February, Japanese real household spending slid 0.2% on month seasonally adjusted and by the same amount on year without seasonal adjustment. Real disposable income was 1.4% greater than a year earlier. Large-store retail sales rose 0.5% on year, reversing a 0.7% drop in the year to January. Total retail sales showed a 12-month increase of 0.1%, same as in January, but posted a solid 0.8% advance in monthly terms.
New Zealand’s trade surplus widened to NZD 194 million last month from NZD 3 million in January, and the 12-month trade balance was in surplus (NZD 758 million) for the first time since 2002. New Zealand exports have been reviving, helped by a more competitive exchange rate.
South Korea posted a USD 1.18 billion current account surplus last month, nearly $1 billion wider than in January. Singapore producer prices increased 3.2% on month and 6.6% on year in February.
The United States releases the Case Shiller house price index and the Conference Board consumer confidence index today.
Copyright Larry Greenberg 2011. All rights reserved. No secondary distribution without express permission.
Tags: British GDP and current account, Japanese unemployment, Obama