Many Data Releases and Ireland Gets a Ratings Downgrade

April 15, 2011

Moody’s downgraded Irish debt by two notches and left the outlook negative.

Chinese GDP growth of 9.7% last quarter surpassed expectations of 9.4%.  GDP had risen 10.3% in 2010 and 9.8% between 4Q09 and 4Q10.  GDP advanced 2.1% quarterly between the final quarter of 2010 and first quarter of 2011.  Other data, many of which were leaked Thursday, also point to further monetary restraint.

  • CPI inflation accelerated to 5.4% in March, most since August 2008, from 4.9% in February.  Food soared 11.7%.  Other consumer prices rose 2.7%.
  • PPI inflation 0.6% on month and recorded a higher 12-month 7.3% rate of climb after 7.2% in February.
  • Retail sales growth accelerated more than expected to 17.4% from 11.6%.
  • Industrial production climbed 14.8% on year versus forecasts of 14.0%.
  • Fixed asset investment in 1Q11 was 25.0% greater than a year earlier compared to a 24.5% increase in the year to 4Q10.

Consumer prices in the euro area shot up 1.4% between February and March.  A 15.1% advance in clothing suggests possible second-order effects.  On-year inflation accelerated to 2.7% from 2.4% in February and 1.6% a year earlier.  Energy went up 2.5% on month and 13.0% on year.  Core inflation, which excludes energy and unprocessed food, posted an unusually big monthly accelerations, printing at 1.5% after 1.1% in February and 1.0% in March 2010.

The dollar rose 0.3% against the Canadian dollar, 0.2% relative to the euro and Swiss franc, and 0.1% against the Australian dollar.  The greenback also fell by 0.3% against the kiwi, 0.2% versus the yen and 0.1% against sterling.  With G20 finance ministers meeting in Washington later today, the Chinese yuan is unchanged against the dollar.

Stocks fell by 0.7% in Japan and Australia, 1.6% in India, 1.0% in Taiwan and 0.2% in South Korea.  Equities rose 0.6% in Indonesia and have traded higher by 0.5% in Germany and 0.2% in Britain.

The most hawkish policymaker at the Bank of England, Andrew Sentance, warned that a weak pound will lift British CPI inflation above 5.0%.  Nonetheless, the 10-year British gilt yield slid three basis points to 3.66%.  The 10-year JGB yield is one basis point lower, and the 10-year German bund is unchanged.  The Greek minus German 10-year bond spread reached 1000 basis points.

Oil prices settled back 0.2% to $107.95 per barrel.  Gold prices firmed 0.3% to $1477.10 per troy ounce.

Revised Japanese data show a bigger 1.8% rise of industrial production in February.  Output was 2.9% higher than in February 2010.  Production in January-February (before the earthquake and thus antiquated) was 3.0% greater than the 4Q10 level.  Production had fallen 1.0% in the third quarter of 2010 and by 0.1% in 4Q but recorded a 16.4% advance in 2010 as a whole.  The inventory ratio sank 3.3% in February and was 4.4% lower in the first two months of 2011 compared to 4Q10.  Capacity usage increase 2.9% in the latest month and was 4.3% greater than a year earlier.  Capacity was unchanged in February.

Euroland recorded a fourth consecutive seasonally adjusted trade deficit in February, printing at EUR 2.4 billion after a shortfall of EUR 3.1 billion in January.  Exports and imports respectively rose 1.6% and 1.0% on month.  The unadjusted deficit in January-February of EUR 17.1 billion was almost twice as big as a year earlier, as imports expanded 27.7% on year.

Italian consumer prices increased 0.4% last month to lift the 12-month increase to 2.5% from 2.4%.  Italy’s trade deficit of EUR 3.6 billion in February compared unfavorably with EUR 2.8 billion  a year earlier.  Exports posted on-year growth of 18.5%.

Norway’s trade surplus widened 4.6% on month to NOK 32.25 billion in March. Danish wholesale prices rose 1.4% and 9.0% on year last month.

Czech producer prices increased 1.0% on month and 6.3% on year in March.  Import prices in February were 4.3% greater than a year earlier.

Indian wholesale price inflation of 9.0% last month was down from 10.2% in February but above analyst forecasts of 8.4%.

Retail sales in Singapore sank 3.6% in February and were 12.1% lower than a year earlier. Turkish unemployment climbed a half percentage point to 11.9% in January.

Scheduled U.S. data releases today include industrial production, consumer prices, the Treasury TIC figures on capital flows, the U. Michigan consumer confidence measure, and the Empire State manufacturing index.  Hoenig, Baxter, and Evans of the Federal Reserve will be speaking.

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

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