Another Slow Monday

April 4, 2011

Commodity prices are higher.  Oil advanced 0.4% to $108.33 per barrel, while gold climbed 0.3% to $1433.80 per ounce.

Upward share price momentum in Asia didn’t carry into European trading.  Stocks advanced 1.5% in China, India, and Hong Kong.  They also gained 1.3% in Thailand, 0.7% in Singapore and 0.5% in Australia.  But Japan’s Nikkei index only edged up 0.1%, and in Europe the Dax is flat and the Paris Cac has eased 0.1%.

The dollar is generally steady, showing no change against the yen and Swiss franc, drops of 0.2% against the kiwi, 0.3% against sterling, and 0.1% against the Australian dollar along with upticks of 0.1% against the euro, yuan, and Canadian dollar.

The yields on 10-year sovereign debt rose three basis points in Britain and by two bps in Japan and Germany.

Japan’s monetary base in March was 16.9% greater than a year earlier as current account balances shot up 88.7% on massive post-earthquake Bank of Japan liquidity infusions. The monetary base had risen just 5.6% on year in February and 4.8% in 2010.  Radiation is still leaking from reactor #2 at the Fukushima facility.

Producer prices in the euro area advanced 0.8% in February and accelerated to a 12-month increase of 6.6% from 5.9% in January and 4.3% in October.  Energy prices jumped another 1.2% and by 12.8% from a year earlier.  Other producer price pressures also intensified this year with back-to-back monthly gains of 0.9% in January and 0.6% in February.  The PPI in January-February was 2.4% higher than its 4Q10 level.

The Sentix index of investor sentiment toward Euroland weakened to a reading of 14.22 in April form 17.07 last month.  The expectations component dropped five points to a six-month low.

Britain’s construction purchasing managers index edged down 0.1 points to 56.4 in March from February’s eight-month high.  It averaged 55.5 in the first quarter compared to 50.8 in the final quarter of 2010.

China’s non-manufacturing PMI improved 16.1 points to a five-month high of 60.2 in March.

The Saudi purchasing managers index for all non-oil activities printed at 62.8 in March after 63.4 in February and an average score in 4Q10 of 60.6.

Spanish consumer confidence sagged to 68.3 in March from 73.4 in February.  Prime Minister Zapatero of Spain said he will not run for reelection next year.  South African motor vehicle sales in March were 22.8% greater than a year before, down from a 12-month 25.2% increase in February.

Romanian producer prices increased 0.8% on month and 10.9% on year in February.  Romanian retail sales were 5.2% lower than a year earlier in February despite rising 1.1% on month.  Czech retail sales posted a slightly smaller 12-month gain of 6.5% in February than the 6.9% rise in the year to January.

Turkish producer prices jumped 1.2% last month and were 10.1% higher than in March 2010.  Turkey’s CPI advanced 0.4% and 4.0% on year.

New Zealand’s commodity price index accelerated in March.  Expected Australian inflation accelerated in March to 3.8%.

Lockhart, Evans and Bernanke of the Federal Reserve will be speaking publicly today.  So will the Bank of Italy’s Draghi, a front-runner to become the next ECB president in the autumn.  No U.S. data releases are scheduled today.  This week’s main event will be the widely expected ECB rate hike on Thursday.

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

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