Awaiting North American Jobs and Trade Data

April 5, 2013

Most stocks are weaker.  The dollar is little changed, and there’s been a big rise in Japanese long-term bond yields.

The dollar eased 0.3% against the yen and has edged up 0.1% relative to the euro, Swissie, sterling, and Canadian, Australian, and New Zealand dollars.  The yuan is unchanged.

Worries about a hostile North Korea weighed on markets in the Pacific Rim.  Whereas Japan’s Nikkei continued to rally and closed 1.6% higher in continuing response to yesterday’s monetary policy initiatives, share prices elsewhere in the Pacific Rim recorded losses of 2.7% in Hong Kong, 1.6% in South Korea, 0.8% in the Philippines, 0.5% in Australia, 0.3% in India, 0.2% in Singapore and 0.1% in China and Indonesia.  In Europe, the German Dax, British Ftse, and Paris Cac are each down around 1.0%.  The Spanish IBEX and Italian MIB have edged 0.1% higher.

The 10-year Japanese JGB yield rebounded nine basis points from a record low to 0.53%.  The 10-year British gilt is two basis points lower, and German bunds are steady.  Several 10-year sovereign debt yields in northern Europe touched record lows.

West Texas Intermediate oil fell by 0.5% to $92.80 per barrel.  Gold nudged up 0.1% to $1553.30 per ounce.

The Bank of Japan’s monthly assessment asserted that the economy has stopped weakening and has exhibited some signs of picking up.  This assessment is unchanged from the one in March.  Japanese reserves fell by $4.45 billion in March following drops of $826 million in January and $8.49 billion in February.  Japan’s index of leading economic indicators improved by 2.5 points to 97.5 in February according to the preliminary estimate.  The index of coincident indicators rose 0.5 points to 92.1.

J.P. Morgan estimates that the global service-sector PMI edged up 0.2 points to 53.4 in March and that the composite global purchasing managers index also climbed by 0.2 points, reaching 53.1.

Germany’s construction purchasing managers index sank further to a significant sub-50 reading of 41.9 in March from 43.9 in February and 47.7 in January.  The sector has been contracting for over a half year.

German industrial orders rebounded from January’s 1.6% decline with a 2.3% increase in February but were unchanged from a year earlier.  Domestic capital goods orders, a leading indicator of business investment, went up 4.4% on month and were 2.0% higher in January-February on average than the 4Q12 level.  Foreign orders, up 2.3% on month, matched the growth of all orders in February.

Austrian wholesale prices fell slightly more than 1.0% both on month and on year in March.  Hungarian industrial output was 1.4% lower than a year before in February, its fifth straight on-year decline.

Filipino consumer price inflation slowed to 3.2% in March from 3.4% in February, and producer prices dropped by 9.1% in the year to February.

Malaysia’s trade surplus widened to 8.2 billion ringgits in February from MYR 3.3 billion in January.

At 12:30 GMT, the U.S. and Canadian monthly employment reports get released.  Trade data arrive at the same hour.  U.S. consumer credit and the Canadian IVEY-PMI index are also scheduled to be reported today.

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

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