Lots of New Data for Markets to Digest

April 2, 2012

China’s two purchasing manager surveys send conflicting signals.

Euroland unemployment rises to another record high.

Bank of Japan quarterly business survey produces somewhat disappointing results.

Mixed array of manufacturing PMI statistics.

Euroland finance ministers agreed to an EUR 800 billion (over $1.05 trillion) increased war chest of rescue funds.

On this first business day of the second quarter and first day of Japan’s new fiscal year, the dollar had fallen 0.3% against sterling and the Australian dollar, 0.2% against the kiwi, and 0.1% relative to the euro, yuan, and yen.  The dollar edged 0.1% higher versus the Canadian dollar and is unchanged against the Swissie.

Share prices in the Pacific Rim rose 1.1% in Indonesia, 0.8% in South Korea, 0.5% in Malaysia and China, 0.4% in India and 0.3% in Japan.  Stocks fell 0.9% in Pakistan and Taiwan, 0.5% in New Zealand, and 0.2% in Hong Kong.  The German Dax is 0.2% stronger, but the Paris Cac and British Ftse are 0.3% and 0.1% lower.

Sovereign debt prices slid.  Ten-year German  bund and British gilt yields have risen four and three basis points.  The 10-year Japanese JGB is up two bps.

Oil and gold prices fell by 0.5% and 0.3% to $102.47 per barrel and $1666.70 per ounce.

Japan’s economy is still struggling to regroup according to the new Bank of Japan Tankan survey.  The big manaufacturers diffusion index printed at a somewhat weaker negative 4, same as in December.  Survey respondents see such improving only a point to minus 3 by mid-2012.  For large non-manufacturers, the diffusion index was +5 in March, a single point higher than in December, and such is expected to be at 5 again in June.  The index for all participants in the survey, manufacturing and services, large and small, had a reading of minus 6 this time versus minus 7 in December, and such is projected to weaken to minus 9 in June.  Capex investment among large firms rose only 1.1% last year and is projected to advance just 1.4% in the year ahead.

Japanese auto sales were 78.2% higher in March than a year earlier.

For a sixth straight month, Euroland unemployment climbed higher, reaching 10.8% in February versus 10.7% in January, 10.2% last August and 10.0% a year earlier.  Selected jobless rates ranged from 4.9% in Holland to 5.7% in Germany, 7.2% in Belgium, 9.3% in Italy, 10.0% in France, 14.7% in Ireland, 15.0% in Portugal, and 23.6% in Spain.  The jobless rate for young workers was 21.6 compared to 20.5% in February 2011.

The HSBC-compiled Chinese purchasing managers index for manufacturing printed at 48.3 in March, the fifth sub-50 reading in a row and down from 49.6 in February and 48.8 in January.  The first quarter had the lowest average score in 12 quarters.  In contrast to those disturbing results, the government’s CFLP purchasing managers index jumped 2.1 points to a 12-month high of 53.1.

South Korea’s factory PMI improved 1.3 points to 52.0 in March, which still implies only modest activity.

India’s manufacturing PMI fell 1.9 points to a 3-month low of 54.7.  Growth in output and orders were each weaker than in February.

Taiwan’s factory PMI improved 1.4 points to 54.1, best in 11 months.

Australia’s PMI sank to a 4-month low and fell below the 50 line of separation between expansion and contraction.  Such printed at 49.5, with an orders sub-index of 48.2.  In other released Australian statistics, building permits slumped 7.8% on month and by 15.2% on year in February.  A gauge of expected inflation over the coming year eased from 2.0% in February to a sub-target 1.8% in March with a core rate also a tad under 2.0%.  Australia’s commodity price index rose 2.7% between March 2011 and March 2012 in SDR terms but fell by 3.9% in Australian dollar terms.

Britain’s manufacturing purchasing managers index improved to a 10-month high of 52.1 in March from an upwardly revised February reading of 51.5 in January.  Orders and production grew faster last month, further suggesting that technical recession has probably been avoided.

Many continental European countries had March PMI figures released.

  • For the euro area, the manufacturing purchasing managers index printed at a 3-month low of 47.7, same as the preliminary flash estimate and down from 49.0 in February and 48.8 in January.  The 1Q average was higher than the 4Q11 mean of 46.9 but low enough to suggest back-to-back possible contractions of GDP.  Weakness seems to be spreading from the peripherals into the core of Euroland.  The German index fell to a 3-month low of 48.4 from 50.2.  The French index sank 3.3 points to a 33-month trough of 46.7.  Austria’s 51.5 was at a 3-month low.  The Dutch reading of 49.6 was 0.7 points lower than in February.  Among some key peripherals, Greece had a reading of 41.3, a 3-month high but implying a big rate of contraction nonetheless.  Spain’s index fell 0.5 points to a 3-month low of 44.5.  Italy’s reading of 47.9 edged up 0.1 to a 6-month high.  Ireland provided a bright spot, improving by 1.8 points to a 10-month, above-50 high of 51.5. 
  • In Eastern Europe, the Czech PMI rose 1.6 points to a 6-month high of 52.1.  Hungary’s PMI shot up 5.6 points to a 13-month peak of 56.8.  Poland’s 50.1 score after 50.0 connoted continuing stagnation in manufacturing. 
  • The Swiss PMI climbed above 50 for the first time since last August, rising 2.1 points to 51.1. 
  • Sweden’s PMI edged down 0.1 and near to the breakeven line, printing at 50.2.
  • Norway’s PMI jumped three points to 59.7, but the Danish index sank 2.6 points to 52.2. 

Turkey’s PMI data suggest a broader slowdown of that economy.  The manufacturing index printed unchanged at a sub-50 score of 49.6, with sub-50 reading in the orders and production components.

South Africa’s PMI fell by 2.8 points to 55.1 after touching a 26-month high in February.

Britain’s Hometrack house price index recorded a monthly increase for the first time in 21 months, albeit of only 0.2%, and a 17-month on-year high of negative 1.0%.  This news and the better-than-forecast U.K. PMI reading helped sterling touch a 4-1/2 month high against the dollar.

Swiss retail sales volume fell 1.3% between January and February and was just 0.8% greater than a year earlier.

Danish retail sales slid 0.1% on month and 0.5% on year in February.

Indonesian CPI inflation accelerated from 3.6% in February to 4.0% in March.  That economy’s trade surplus narrowed 32% in February.  South Korean CPI inflation decelerated to 2.6% last month from 3.1% in February, thus moving into the lower half of the Bank of Korea’s 2-4% target range.

Turkish working day adjusted on-year GDP growth slowed to 4.7% in 4Q11 from 8.0% in 3Q11.

Scheduled U.S. data today feature the March manufacturing PMI index and construction spending.  Bank of Canada Governor Carney and the Fed’s Pianalto will be speaking publicly today.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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