U.S. to Release Several Indicators Today

March 26, 2013

Misgivings persist over the Cyprus bailout, which continues to be handled clumsily.  Banks in that country remain closed today and tomorrow.  European finance ministers first suggested the deal might be a trendsetter for other banking systems in trouble but then reverted to calling Cyprus a special case.

Attention now shifts to the United States.  In a speech late yesterday, Fed Chairman Bernanke defended the net benefits to global growth of aggressive quantitative easing and asserted that such rendered claims of competitive devaluation incorrect. 

The United States releases new home sales, the Case Shiller house price index, durable goods orders, the Richmond Fed manufacturing index and weekly chain store sales figures today.

In his first semi-annual testimony, Bank of Japan Governor Kuroda stressed the composition of the central bank balance sheet as well as the rate of its growth, promising to lengthen the maturity of the BOJ’s asset holdings and to purchases riskier instruments than before.  He reaffirmed the commitment to achieving 2% inflation within two years, a goal highly doubted as possible among private sector analysts.

Central banks in Hungary and Turkey will be making monetary policy announcements today as well.

Meantime, the dollar has barely moved on net since the close on Monday.  It is up 0.2% against the yen and 0.1% versus the kiwi and euro but down 0.1% relative to the Aussie dollar, Swiss franc and Canadian dollar.  Sterling and the yuan are unchanged against the greenback.

Stocks fell 1.5% in China, 0.8% in Australia and 0.6% in Japan.  Share prices gained 1.3% in Thailand, 1.0% in the Philippines and 0.9% in Indonesia.  In Europe, the Paris Cac, German Dax and British Ftse show gains thus far of 0.7%, 0.3%, and 0.1%.  But the Spanish IBEX is off 0.4%, and stocks in Milan are only steady.

The 10-year Japanese JGB yield plumbed as low as 0.525%, a mere 8.5 basis points above its 2003 record low. 

Ten-year German bund and British gilt yields are two basis points firmer.

The price of West Texas Intermediate crude oil rose 0.5% to $95.27 per barrel.  Gold recovered 0.1% but remains below $1600 at $1597.20 per ounce.

Small business sentiment in Japan, an index compiled by Shoko Chukin Bank, jumped by a sharp 3.7 points to a March reading of 49.7, which is the best post-2007 reading.  Manufacturing rose 3.5 points to 48.3, while sentiment among non-manufacturing businesses printed at 50.7, three points better than in February.

Japanese corporate service prices in February posted the first positive 12-month change since April 2012, albeit an increase of just 0.1%.  Such had dropped 0.8% in the year to October 2012.  The CSP index increased 0.4% on month, reversing all of January’s monthly decline.

South Korean real GDP rose 0.3% between 3Q12 and 4Q12 according to revised data.  On-year growth amounted to 1.5% last quarter and a 3-year low of 2.0% in 2012 as a whole.

Industrial production in Singapore posted monthly and on-year declines of 0.7% and 16.6% in February.    Hong Kong recorded a HKD 33.99 billion trade deficit in February, 23.8% wider than in January but 25.8% narrower than in February 2012.  Such comparisons early in the calendar year are distorted by the Lunar New Year holiday that occurs sometimes in January and other years in February.

The Confederation of British Industries released its March monthly survey of distributive trends, showing a fourth straight deterioration.  The index printed at zero, down from positive readings of 8 in February, 17 in January, 19 in December and 33 in November.

French consumer confidence printed lower than forecast at 84 in March after readings of 86 in both January and February.

Icelandic CPI inflation slowed to 3.9% in March from 4.8% in February.  Swedish producer prices fell by a steeper 3.7% in February than the on-year declines of 2.4% in December and 2.9% in January.  Domestic producer prices were 1.6% lower, while import prices sank by 4.2%.  Finnish joblessness remained at 8.7% last month. 

KOF of Switzerland released new growth and inflation forecasts.  GDP is projected to climb 1.4% this year and 2.2% in 2014, while consumer prices are forecast to dip 0.1% in 2013 and rise just 0.6% next year.

New Zealand posted a NZD 414 million trade surplus in February.  Analysts were looking for a near-zero balance.  Exports jumped 16% on month, dwarfing the 3.9% increase of imports from January when a trade deficit of NZD 287 million was recorded.

South Africa’s leading and coincident indices of economic indicators rose 0.9% but fell 0.1% in January, respectively.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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