End-April Brings Confirmation of Spanish Recession

April 30, 2012

Spain posted a second consecutive quarter of negative GDP growth.

Japan closed for Showa Day, commemorating Emperor Hirohito’s birthday.

Euroland released data on consumer prices and money and credit growth.

The dollar has advanced 0.4% against the Australian dollar, 0.3% versus the kiwi, and 0.2% relative to the loonie, euro and Swiss franc.  The dollar is steady against sterling, 0.4% weaker against the yuan, and 0.2% softer against the yen.

The Paris Cac and British Ftse have weakened 0.8% and 0.5%.  In the Pacific Rim, share prices rose 1.7% in Hong Kong, 0.8% in Australia and Vietnam, 0.7% in New Zealand and India, 0.4% in Indonesia and 0.3% in South Korea and Taiwan.  Chinese equities slid 0.2%.

Oil prices fell 0.7% to $104.16 per barrel.  Gold prices eased 0.2% to $1662.30 per ounce.

The yields on German bunds and British gilts fell by three and one basis points.

Spanish GDP fell by 0.3% in the first quarter of 2012, the same amount of contraction as in the final quarter of 2011.  The last Spanish recession ended at the end of 2009.  GDP was also 0.4% lower than in 1Q11.  Spain recorded a EUR 5.9 billion current account deficit in February.  The deficit averaged EUR 5.8 billion per month in the first two months of 2012.

CPI inflation in the euro area slowed less than assumed to 2.6% in April from 2.7% in March, February, January and December. 

Euroland M3 money growth accelerated to 3.2% in March.  M3 was 2.8% greater in the first quarter than a year earlier.  However, loans and credit to the private sector remains very anemic with on-year increases of only 0.6% and 0.5% in March.

The volume of German retail sales rebounded 0.8% last month after falling in January and February.  Retail sales in the first quarter were 1.0% lower than in 4Q11.  Sales in March were 2.3% higher than in March 2011.

Greek retail sales plunged 13.0% between February 2011 and February 2012.  Portuguese industrial output and retail sales posted on-year declines in March of 5.8% and 4.8%. 

The British Hometrack house price index ticked 0.1% higher on month in April but posted an on-year decline of 0.9%.  Italian CPI inflation remained at 3.3% in April (3.8% on a harmonized basis).  Icelandic producer prices in March were 6.4% higher than a year earlier.  The Icelandic trade surplus in March of ISK 5.4 billion was 58% smaller than the February surplus.

Expected Australian CPI inflation over the next year edged up in April by a tenth percentage point to 1.9%.  Australian M3 and private credit were 7.7% and 3.4% greater than a year earlier in March. 

New Zealand M3 money growth slowed to 5.0% last month from 5.5% in February.  Building permits in New Zealand jumped 19.8% on month in March, and the trade surplus of NZD 134 million that month was only a third as large as analysts were anticipating.

South Korean industrial production sank 3.1% in March, more than reversing a 0.8% increase in February.  Singapore’s jobless rate was only 2.1% last quarter.  Thailand posted current account and trade deficits in March of $1.5 billion and $1.4 billion.  Business sentiment in Thailand improved to a reading in March of 55.5 from 52.7 in February. Taiwanese GDP was only 0.4% greater than a year earlier in the first quarter of 2012.

M3 money and private sector credit in South Africa were 6.6% and 9.2% higher in March than a year earlier.  Both paces accelerated from February.  Turkey’s trade deficit narrowed 25% on year to $7.4 billion in March but was still marginally larger than analysts had forecast.

Scheduled U.S. data to be released today are personal income and spending, the Chicago and Milwaukee PMI indices, and the Dallas Fed manufacturing index.  Dallas Fed President Fisher, a hawk, will be speaking publicly.  Canada reports producer prices, raw material prices, and monthly GDP today.

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

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