Stocks Somewhat Higher in Europe

April 19, 2012

Risk aversion continues to swing daily.  Today the mood is more hopeful because Spain’s government managed to sell marginally more 2- and 10-year debt than planned although at higher yields.  The Paris Cac has risen 0.9%, and the German Dax and British Ftse are 0.6% higher.

Share prices had been mixed in the Pacific Rim, dropping by 1.1% in Vietnam, 0.8% in Japan, and 0.2% in China and South Korea but rising 1.5% in Thailand, 1.0% in Hong Kong, and 0.3% in Singapore and Australia.

The dollar likewise is mixed, with gains of 0.5% against the yen, 0.3% versus the kiwi, and 0.2% relative to the Swiss franc but losses of 0.2% against the loonie and 0.1% versus the Aussie dollar and sterling.  EUR/USD is steady and slightly above $1.3100.

Ten-year British gilt and German bund yields firmed by two and one basis points.  Japanese JGBs are unchanged.

Gold and oil prices edged up 0.2% and 0.3% to $1642.10 per ounce and $103.02 per barrel.

Brazil’s Selic interest rate was cut late Wednesday by 75 basis points to 9.0%, evoking criticism about a seeming loss of central bank independence there.

Bangko Sentral ng Pilipinas left the Filipino monetary policy settings unchanged, pausing after having implemented 25-basis point cuts in January and March.

Japanese stock and bond transactions generated a JPY 837 billion net capital inflow last week following a net inflow of JPY 1.946 trillion in the first week of this fiscal year.

Japan’s unadjusted customs trade balance swung from a JPY 171 billion surplus in March 2011 to a deficit of JPY 83 billion in March 2012, as import growth of 10.5% surpassed export expansion of 5.9%.  Declining surpluses with Asia (17.8%) and the EU (76.6%) outweighed a 47% increase versus the United States.  Export volumes were higher than a year earlier for the first time since September.  The seasonally adjusted trade deficit widened 93.5% on month to JPY 621 billion in March as imports increased 6.3% while exports went up 1.2%.  Japan recorded a JPY 4.4 trillion customs trade deficit in fiscal 2011 following surpluses of JPY 5.33 trillion in FY10 and JPY 5.19 trillion in FY09.  Back in FY07 before the global financial crisis, there was a JPY 10.16 trillion customs trade surplus.

Consumer prices in New Zealand rose 0.5% last quarter and eased to an on-year pace of 1.6% from 1.8% in the fourth quarter of 2011.

Business sentiment in Australia worsened by two points to a minus 1 reading last quarter.

Germany’s six economic institutes released a semi-annual joint forecast.  They project GDP growth of 0.9% this year and 2.0% in 2013 and government deficits averaging 0.4% of GDP over those two years.

Industrial orders in Italy slumped 2.5% in February and were 13.2% lower than a year earlier. 

Dutch unemployment printed at 5.9% in each month of the first quarter.  The Greek current account posted a EUR 1.09 billion deficit in February after a EUR 1.49 billion shortfall in January.  Danish consumer confidence rose for a fourth straight month, posting a reading of 0.6 this month after minus 0.4 in March.

Scheduled U.S. data to be released today include existing home sales, the index of leading economic indicators, the Philly Fed manufacturing survey, and weekly jobless insurance claims.  A preliminary report on Euroland consumer confidence arrives today as well.  The IMF/World Bank meetings continue.  Zoelick of the latter and Lagarde of the former both speak today, and G20 finance ministers and central bank chiefs will first gather to share information and advice.

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

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