Market Attention on Japan and Libya

April 11, 2011

Northeast Japan was rocked by yet another 7.1 magnitude aftershock followed by new tsunami warnings.

Qaddafi reportedly agreed to a cease fire proposal made by the African Union, but doubts persist that the civil war will really end in Libya.

After a quarterly meeting of Bank of Japan branch managers, the assessment was downgraded for seven of the country’s nine main regions.

Japanese core private domestic machinery orders fell 2.3% in February, a month before the devastating Sendai earthquake.  Analysts had predicted a 1.1% decline.  Core machinery orders in January-February were 3.1% greater than the 4Q level after sliding 6.9% in the final quarter of 2010.  Foreign orders for Japanese machinery fell 10.1% in February but were 50.3% greater than a year earlier.

The dollar is trading up 0.3% against sterling, 0.2% relative to the Australian dollar, and 0.1% higher against the euro and Swiss franc.  It is unchanged against the Canadian dollar and Chinese yuan and 0.1% softer versus the yen and kiwi.

Stocks are mostly lower on Japan’s geological news, with drops of 0.5% in that country, 1.0% in India, 0.9% in Malaysia, 0.8% in Singapore, 0.6% in China, 0.5% in Thailand and Sri Lanka, 0.4% in Hong Kong, 0.8% in France and 0.6% in Germany. 

Oil prices settled back 0.5% to a still painfully high $112.22 per barrel on news from Libya. Gold slid 0.2% to $1471.00 per troy ounce.

Sovereign ten-year bond yields firmed a basis point each in Germany and Japan and by two basis points in Great Britain.

China posted a USD 140 million trade surplus in March, better than forecasts of a $3.3 billion deficit.  A $7.3 billion deficit had occurred in February.  The whole first quarter, when Chinese trade tends to be seasonally the weakest, saw a trade deficit of $1.02 billion with on-year growth of 26.5% in exports and 32.6% in imports.  In just March, exports and imports were 35.8% and 27.3% greater than a year earlier.  Calendar year trade surpluses of $183 billion and $196 billion were posted in 2010 and 2009.

Taiwan experienced a $1.8 billion trade surplus in March with on-year export growth of 16.7%. 

South Korean M2 money growth slowed to 4.7% on-year in February from 6.5% in January.

Indian industrial production growth slowed to 3.6% on year in February from 15.1% in the year to February 2010 and 7.8% in April 2010 – February 2011.  Malaysian industrial production in January-February was 2.6% higher than a year earlier.

French industrial production rose 0.4% on month and 5.6% on year in February, with factory output posting a 7.2% increase in the latest statement year. Italian industrial production advanced 1.4% on month in February and 2.3% from a year earlier.  The French and Italian figures were weaker than Germany’s where a 1.6% on-month increase was reported last week.  Industrial output for the whole euro area will be announced this Wednesday.

Norwegian consumer price inflation slowed to 1.0% last month from 1.2%, while the core CPI remained at 0.8% on year.  Norwegian producer prices jumped 2.5% on month and by 21.4% on year. Danish consumer price inflation held steady at 2.7% last month and posted a 0.6% on-month increase.  Czech CPI inflation dipped to 1.7% in March from 1.8% in February.

The Netherlands’ trade surplus widened to EUR 3.9 billion in February from EUR 2.8 billion in January.  Denmark had current account and merchandise trade surpluses of DKK 5.2 billion and DKK 6.0 billion in February.  Romania’s trade deficit doubled to EUR 0.4 billion in February. Turkey’s current account deficit widened slightly in February to $6.1 billion from $6.0 billion in January. 

Credit card spending in New Zealand rose 1.3% last month.

No U.S. economic data are scheduled.  Canada releases house prices, and Mexican trade figures get reported.  Yellen of the Fed speaks publicly.

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

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