Weak Data and Super Tuesday Results
March 7, 2012
Australian GDP rose only 0.4% last quarter, half as much as forecast. A 4.7% decline in Australia’s terms of trade was the greatest quarterly slump in a couple of years. On-year growth decelerated to 2.3% from 2.5% in 3Q. Australia’s construction PMI index worsened further to a reading of 35.6 in February from 39.8 in January and 41.0 in December.
German industrial orders plummeted 2.7% in January versus an expected 0.5% increase. Orders were 3.3% below the 4Q11 average and 4.9% less than in January 2011. Domestic orders for capital goods, a leading indicator of future business investment, sank 4.2% and were 3.1% below the 4Q11 mean. Foreign demand slumped 5.5% on month, including a 6.5% decrease among capital goods.
Spanish industrial production on a working day adjusted basis fell by 4.2% in January.
Brazilian GDP increased just 0.3% last quarter and by 1.4% from a year earlier.
A 1.2% on-year increase in British shop prices in February was the weakest since March 2010.
Romney won most of the Super Tuesday contests including Ohio by a slim margin, but the overall result was not decisive. Romney losses in Georgia, Tennessee, and Oklahoma underscored distrust among southern voters. His 415 total of delegates won is less than 100 greater than the sum of delegates taken so far by Santorum, Gingrich and Paul. A brokered Republican convention in Tampa is still a possibility, however remote.
Markets are less panicky than yesterday, perhaps because Germany’s cabinet approved the new EU fiscal pact. But a Greek credit event remains a strong danger. Chatter today concerns whether tomorrow’s PSI deadline will be allowed to slide.
The dollar has fallen 0.7% against the kiwi, 0.2% versus the yen, euro and Australian dollar, and 0.1% relative to the loonie and Swissie. The yuan slid 0.1%, and sterling is steady.
Asian stocks lost ground in follow-through to Monday’s bloodbath in Europe and North America. Share prices dropped 1.5% in Australia, 1.0% in Malaysia, 0.9% in South korea, Hong Kong and the Philippines, 0.7% in China, and 0.6% in Japan, Singapore and Indonesia. But a better tone resurfaced in early European trading where the Paris Cac, British Ftse and German Dax are 0.7%, 0.3%, and 0.2% firmer.
Gold and oil prices recovered 0.6% and 0.5% to $1681.60 per ounce and $105.26 per barrel.
Ten-year German bund and British gilt yields edged a basis point higher, while the JGB is down a basis point.
Today’s better tone could prove fragile. In addition to Europe’s powder keg that is Greece and Portugal, several U.S. indicators get released today, including quarterly productivity, the monthly ADP estimate of private employment, and consumer credit.
In other news, Japan’s Ministry of Finance reported no intervention in the last statement month and a $3.79 billion decline of reserves during February. Japan’s index of leading economic indicators rose 0.9 points to 94.9 in January, but the coincident index unexpectedly fell 0.5 points. The index of lagging indicators also declined.
Danish industrial production rose 1.8% in January after stagnating the month before. Norwegian industrial output went up 4.5% in January and was 3.0% higher than a year earlier. Norway’s current account surplus widened 2.7% last quarter to NOK 113 billion. Hungarian industrial output trimmed December’s 7.3% tumble with a 2.1% upturn in January. Swiss unemployment remained steady on an unadjusted basis at 3.4% in February. Polish unemployment rose 0.3 percentage points to 13.5% in February.
South African business sentiment improved 2.4 points to a reading of 99.5 last month. Taiwan’s trade surplus in February was greater than forecast.
Poland’s central bank will announce its latest interest rate decision today. Later on, we get New Zealand’s rate decision at 20:00 GMT, and tomorrow brings decisions from the central banks of Britain, Euroland, and Canada as well as Greece’s PSI deadline. Canadian building permits arrive today.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Euro, German industrial orders, Greek debt PSI, Super Tuesday results, Yen
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