European Stocks Up in First Post-Easter Trading

April 2, 2013

Equities have risen 1.2% in France and Germany, 1.0% in Britain, 0.7% in Spain and 0.4% in Italy.  Most of Europe was shut for Easter Monday yesterday.  The Cypriot exchange also finally reopened.  Stocks in the Pacific Basin closed mixed with drops of 1.3% in The Philippines, 1.1% in Japan, 0.5% in South Korea and 0.3% in China but rises of 0.9% in India, 0.4% in Indonesia and Australia and of 0.3% in Hong Kong and Singapore. 

The yuan strengthened beyond 6.2000 per dollar for the first time in 19 years. 

Commodity currencies are well bid.  The U.S. currency is down 0.7% against the kiwi, 0.5% versus the Aussie dollar and 0.4% relative to the loonie.  The greenback is steady against the yen, up 0.3% versus sterling and 0.1% firmer relative to the euro and Swiss franc.  Oil and gold, by contrast, have barely moved.

The 10-year German bund yield is up two basis points.  The 10-year Japanese JGB is off a single basis point.

The Reserve Bank of Australia left its Official Cash Rate unchanged at 3.0%.  While remaining in a wait and see mode, Aussie monetary officials put less emphasis than before on the expected future stimulus of previous rate cuts totaling 175 bps between November 2011 and December 2012.  A commitment to reducing the OCR additionally if needed in the future to support demand was reaffirmed.

Bank Rossii, the central bank in Russia, left its refinancing rate at 8.25% for the seventh time in a row but implemented a 25-basis point reduction of the rate on its long-term liquidity operations.

Euroland unemployment was at a record high of 12.0% in both January and February versus 10.9% in February 2012.

Several more manufacturing purchasing manager surveys for March were published, most notably for Euroland, Britain and Australia.

In the euro area, the final March PMI index printed at 46.8, up from a flash estimate of 46.6 but a 3-month low nonetheless.  There has been a sub-50 reading each month since August 2011, and a quarterly average score in 1Q13 of 47.5 leaves no hope of a speedy end to the region’s recession.

  • Ireland’s 48.6 reading was a 14-month low and down from 51.5 in February.
  • Germany’s 49.0 was at a 2-month low.
  • The Dutch reading of 48 was a 10-month low.
  • Austria’s 48.1 was a 3-month low.
  • Spain (44.2) and Italy (44.5), which are the 3rd and 4th biggest Ezone economies, recorded 5- and 7-month lows.
  • The French reading was at a 3-month high but substantially below the 50-no change threshold at 44.0.
  • The Greek score of 42.1 was a 2-month low. 

Britain’s manufacturing PMI printed at 48.3 in March, a shade weaker than expected although above February’s 47.9 reading.

Poland’s PMI was 48.0, lowest since October and down from 48.9 in February.

The Czech PMI of 49.1 was at a 2-month low.  Like many European economies, a bright spot was diminishing input price inflation.

Hungary scored a 55.7 after 54.1 in February and 55.9 in January.

Denmark’s 52.5 reading was substantially lower than the 60.3 February reading and even less than January’s 56.1 score.

The Swiss PMI unexpectedly fell below the 50 threshold to 48.3 following two consecutive readings in the low 50s.

Sweden’s 52.1 was the highest score since mid-2011 and up from 50.9 in February.

South Africa posted a 49.3 PMI in manufacturing after readings of 53.6 in February, 49.1 in January and 47.4 in December.

Mexico shot a 52.4 after 53.4 in February and 55.0 in January.

Italy’s jobless rate ticked down to 11.6% from a 20-year high of 11.7% in January.  The Danish jobless rate also eased 0.1 percentage points in February, printing at 4.6%.  So did unemployment in Belgium, which slipped to 8.1%.  In Romania, however, unemployment edged higher to 6.7%.  Romanian PPI inflation slowed to 5.4% in February from 5.7% in January, and retail sales were 1.8% higher in February than a year earlier.

Four German states reported March CPI inflation.  On-year comparisons ranged from 1.3% to 1.5% among them.

Growth in Japan’s monetary base accelerated to 19.8% in March from 15.0% on-year in February and to 15.2% in 1Q13 from 9.2% in the final quarter of 2012 and 7.0% in full 2012.  Labor cash earnings in Japan were 0.7% weaker in February than a year earlier.  Analysts were anticipating a smaller on-year drop.

Australian commodity prices on an SDR basis were 7.5% below year-earlier levels in March.

The United States releases factory orders, auto sales, the New York NAPM index and the IBD/TIPP optimism index today.  The Bank of Japan begins its first policy meeting of the Kuroda era tomorrow and will announce fresh stimulus on Thursday.  Central bank announcements on Thursday are also awaited from the ECB and Bank of England.  The U.S. jobs report gets released on Friday.

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

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