Euroland Sentiment Indices Unexpectedly Buoyant
March 28, 2014
The dollar has risen 0.2% against the yen and 0.1% versus the Swiss franc and Australian dollar but also shows losses of 0.1% against hte kiwi, loonie and sterling. The yuan and euro are unchanged against the dollar.
Share prices in the Pacific Rim climbed 1.1% in Hong Kong, 1.0% in Indonesia, 0.6% in India, 0.5% in Japan and 0.3% in Australia and New Zealand. The German Dax, Italian MIB and Spanish IBEX have each gained at least 1.0%, while equities are up 0.7% in Zurich, 0.6% in Paris and 0.4% in London.
Oil and gold are up 0.5% and 0.2% at $101.77 per barrel and $1,296.90 per ounce.
The 10-year Japanese JGB and German bund yields remained steady, while the British gilt rose by two basis points.
Japanese consumer prices, retail sales, household spending and labor statistics were reported.
- Core CPI inflation in February rose 0.1% on month and posted a 12-month 1.3% increase for a third month in a row. Total consumer prices were flat on month, seasonally adjusted, and 1.5% higher than a year before. Excluding seasonal food as well as energy, consumer price inflation edged up to 0.8% from 0.7% in both December and January. Tokyo consumer prices rose 0.1% in March and 1.3% on year. Core Tokyo CPI inflation was 1.0%.
- Total retail sales increased 0.3% on month and 3.6% on year in February, close to expectations. Large-store sales were 1.3% greater than a year before, reflecting increases of 2.9% in department store sales and 0.5% in supermarket sales.
- Real household spending slumped 1.5% on month in February, erasing January’s 1.6% advance, and recorded the first on-year drop, that being 2.5%, since August. Workers’ real disposable income fell 1.3% on year.
- The jobless rate declined to a fresh post-Great Recession low of 3.6% in February from 3.7% in both December and January. The job seekers-to-offers ratio improved to 1.05 from 1.04 in January and 1.03 in December, and employment growth accelerated to 0.7% on year from 0.5%.
Economic sentiment in the euro area jumped 1.2 points to a reading of 102.4 in March. That’s 13.4 points better than in April 2013 and constitutes a 17.2-point recovery since October 2012. Consumer confidence recorded a 3.4-point improvement, and the confidence measures in the industrial, retail and services sectors went up by 0.2, 0.4, and 0.9 points. Construction softened 0.3 points. The business climate index improved to 0.39 from 0.36 in February and -1.05 in April 2013.
Three of five German states reporting March inflation revealed lower rates, while CPI inflation in Hesse and Bavaria remained unchanged.
German import prices dipped 0.1% on month and fell 2.7% on year in February. Energy declined 0.2% and by 8.1% from February 2013. Export prices were unchanged on month and 0.7% lower than a year earlier.
Producer prices in Italy and France recorded year-on-year declines of 1.4% and 1.7% in February. Iceland’s and Greece’s PPIs plunged 9.9% and 3.5% in the same 12-month span. Spanish consumer prices in March were just 0.1% higher than a year before.
On-year growth in Swedish retail sales remained at 3.5% in February. Spanish retail sales fell 0.5% on year in February when adjusting for variations in the number of working days. French consumer spending edged up 0.1% in February but was 0.3% lower than a year earlier.
Swiss government officials lowered projected growth and inflation in both 2014 and 2015. The Cypriot jobless rate was 16.0% last quarter.
Austria’s manufacturing purchasing managers index fell by a larger-than-expected 2.0 points to an 8-month low of 51.0 in March, reflecting concerns about the crisis in Ukraine and the risk of Ezone deflation.
The last revision of British 4Q13 GDP growth confirmed a quarterly rise of 0.7% and an on-year advance of 2.7%. Total business investment went up 8.7% on year. The U.K. current account deficit far exceeded expectations in the quarter. At GBP 22.36 billion, such was little changed from the 3Q deficit of GBP 22.83 billion. Britain’s November-January index of services went up 0.9% relative to the prior three-month period.
British consumer confidence improved two points to minus 5, best since August 2007.
South Korean industrial production fell 1.8% in February but was 4.3% greater than a year earlier. The data were distorted by the Lunar New Year.
Scheduled U.S. data today include the U. Michigan consumer sentiment index and personal income and spending. The Chicago and Kansas City Fed presidents speak publicly.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: British current account, Euroland economic sentiment, German CPI and import prices
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