A Few Open Markets Reacting to Friday’s Poor U.S. Labor Statistics

April 9, 2012

The first week of April saw a resurgence of risk aversion centered on worries about Spanish and Italian debt but culminating in a surprisingly weak U.S. March jobs report released on Good Friday. 

The euro remains fractionally above $1.3000 but is softer than its 20-day moving average.  From Friday’s closing levels, the dollar is down 0.2% against the yen but up that amount versus the euro, Swissie, and Australian dollar.  The U.S. currency has edged up 0.1% against the Canadian and New Zealand dollars and is unchanged relative to sterling and the yuan.

In the Pacific Rim, Japan’s Nikkei slumped another 1.5% to 9546, 6.9% below the closing high on March 27.  Share prices also fell today by 1.5% in India, 1.6% in South Korea, 1.4% in Taiwan, 1.0% in China, and 0.9% in Singapore.  U.S. stock futures point to a sharp drop at the open even though speculation has revived about the possibility of QE3 by the Federal Reserve.

The 10-year JGB yield dipped another two basis points to 0.97%.

Gold is 0.7% stronger at $1641.20 per ounce, while oil has dropped by 1.6% to $101.70 per barrel.

A wide array of markets remained shut today for Easter Monday especially in Europe, including those in Britain, Switzerland, Italy, Germany, Denmark, the Czech Republic, Belgium, Holland, Hungary, Poland, Portugal and Greece.  South Africa, New Zealand, Australia, Canada and Thailand are closed, too.

Japan’s seasonally adjusted current account surplus rebounded from JPY 135 billion in January to JPY 854 billion in the leap month of February, with merchandise exports rising 7.5% on month after dropping 4.4% in January.  The unadjusted trade surplus of JPY 102 billion in February essentially met analyst expectations, the the unadjusted current account swung from a JPY 437 billion deficit in January to a surplus of JPY 1.178 trillion, which was still 30.7% smaller than in January 2011.  The unadjusted “Basic Balance,” which includes the current account and long-term capital movements, posted a deficit in February of JPY 734 billion versus surpluses of JPY 441 billion in January and JPY 1.739 trillion in February 2011.

Japan’s economy watchers index jumped to an 8-month high in March of 51.8 from 45.9 in February and 44.1 in January, prompting government officials to upgrade their economic assessment to “picking up.”  The forward-looking outlook component of the economy watchers index slid 0.4 points, however, to 49.7 from February’s 50.1 reading, which had been the highest since April 2007.

China reported consumer price and producer price data.  CPI inflation accelerated from a 20-month low of 3.2% in February to 3.6% on food price pressures, while the 12-month change in producer prices (minus 0.3% after no change in the year to February) moved into negative territory for the first time since November 2009.

South Korean producer prices rose 0.6% last month, trimming the 12-month increase of such to a 26-month low of 2.8%.

Industrial production in February rebounded from January monthly declines to rise by 3.0% in Greece and 0.7% in Turkey.  Compared to February 2011, output fell 8.3% in Greece but climbed 1.6% in Turkey accounting for the extra leap day.

Greek on-year CPI inflation slowed to 1.7% in March, lowest since last August.

In North America, no U.S. economic data are scheduled for release, but Fed Chairman  Bernanke will be speaking in public.  Mexican CPI and PPI figures arrive, and so does the release of Canadian housing starts.

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



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