Some Reassuring News

April 12, 2012

Australia reported much better-than-expected labor statistics for March.  Employment climbed 44.0K, the second increase of more than 40K in three months, and the jobless rate held at 5.2% instead of ticking up a tenth as forecast.  The Aussie dollar recovered 1.0% against the greenback.

Chinese bank lending last month leaped by 1.011 trillion yuan, compared to rises of 711 billion yuan in February, 738 billion yuan in January and 641 billion yuan in December.  This was the first rise of more than 1 trillion yuan since January 2011.  On-year growth of M0 money (10.6%), M1 (4.4%) and M2 (13.4%) were higher than February results as well.

Euro area industrial production rose 0.5% in February.  Analysts had anticipated a drop of about that amount because of decreases in Greece, Ireland, Spain and even Germany.  But Holland (+13.0%) and Finland (+2.1%) scored solid advances, and France eked out a 0.2% rise.  Production was 1.8% lower than a year earlier, and the January-February average level was 0.6% below the 4Q11 mean.

Italian auctions of sovereign debt did not go as poorly as feared.

Fed Chairman Yellen made reassuring remarks that the Fed remains committed to supporting growth in jobs and activity.

The dollar has edged up 0.1% against the yen and eased by 0.5% against the kiwi, 0.4% versus the loonie, and 0.3% relative to the euro, Swissie and sterling.  The yuan is steady.

Stocks advanced in the Pacific Rim by 0.7% in Japan, 0.8% in Australia, 1.3% in Thailand, 2.0% in China, 0.9% in Hong Kong, 1.4% in Vietnam, and 1.1% in Singapore.  In Europe, the mood is more guarded, with an uptick of 0.2% in the German Dax but losses of 0.5% and 0.5% in the Paris Cac and 0.2% in the British Ftse.

The 10-year Japanese JGB yield remains at 0.95%, while comparable British gilt and German bund yields are up 3 and 1 basis points.

Oil climbed 0.5% to $103.22 per barrel, while gold slid 0.2% to $1657.60 per ounce.

Bank Indonesia left its reference rate unchanged for a second consecutive month at a record low of 5.75%.  Previous cuts totaling 100 basis points were implemented in October, November and February.

British merchandise trade posted a larger GBP 8.77 billion deficit in February, 11.3% wider than in January.  The goods and services deficit of GBP 3.40 billion was 35.8% bigger than in the prior month.  Exports posted a drop of 3.4% on month.

Japanese domestic corporate goods prices increased 0.6% both on month and on year in March, thanks to a 6.7% jump in oil product prices.  Export prices went up 3.6% on the month, while import prices increased 6.0%.  Japanese M2 money recorded on-year growth of 3.0% both in March and the first quarter compared to a gain of 2.7% in 2011 as a whole.  Broad liquidity rose only 0.7% in the year to March.  Stock and bond transactions in the first week of the new fiscal year generated a JPY 1.95 trillion net capital inflow as Japan sold JPY 1.91 trillion net of foreign bonds.

The Bank of Japan’s quarterly branch managers review of regional economic conditions led to upgrades in two of the country’s nine districts.

In South Korea, unemployment fell 0.3 percentage points to 3.4% last month, and M2 growth quickened in February to 5.3%.  Filipino M3 money growth held steady at a 12-month 7.2% pace in February.  Indian industrial output was just 4.1% higher than a year before in February after an even smaller 1.1% advance in January.

French CPI inflation held at 2.3% in March despite a larger-than-expected 0.8% increase from the month before.  The French current account deficit in February widened 13.6% versus January to EUR 5.0 billion.  Dutch retail sales posted a 1.7% on-year decline in the first two months of 2012.  Finnish retail sales rose on-year by 9.0% in nominal terms and 5.4% on a volume basis during February.  Wholesale turnover in Finland was 13.5% greater than in February 2011.

Swedish CPI inflation slowed to a 17-month low of 1.5% in March from 1.9% in February, and the core inflation rate was only 1.1%.  Portuguese CPI inflation declined to 3.1% from 3.6% in February. Irish CPI inflation quickened a tenth percentage point to 2.2% last month.  In February, the Spanish index of leading economic indicators ticked 0.1% higher, while the coincident index dipped by a similar amount. 

U.S. and Canadian trade figures will be released at 12:30 GMT.  The U.S. also reports produceer prices and weekly jobless claims, while Canadian new home price data arrive.  Many Fed officials speak publicly today:  Rosengren, Dudley, Plosser, Lockhart, and Raskin.

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

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