Post-Jobs Report Drop in Equities Extended in Europe

April 7, 2014

On an otherwise light day, share prices have fallen 1.2% in Frankfurt, Germany, 0.9% in Zurich, 0.7% in Paris and London and 0.5% in Milan and Madrid.  In the Pacific Rim, Japan’s Nikkei slumped 1.7%, and stocks dropped by 0.9% in New Zealand, 0.6% in Singapore and Hong Kong but advanced 0.8% in the Philippines.  China was shut in continuing observance of the Ching Ming Festival.  Stock losses were led by the technology sector.  While the U.S. jobs data on Friday were about as analysts had forecast, euphoric whisper numbers in the market right before the release were not met.

Dollar/yen is unchanged from Friday’s close.  The dollar has edged up 0.2% against the Canadian and Australian dollars and 0.1% versus the kiwi but is down 0.3% against the Swissie, 0.2% relative to the euro and 0.1% against the yuan and sterling.

Ten-year sovereign debt yields in Britain and Japan fell by two basis points, and the 10-year German bund is a basis point softer.

The price of West Texas Intermediate oil fell by 0.5% to $100.67 per barrel.  Gold is off 0.2% at $1,301.00 per ounce.

German industrial production rose 0.3% in February and averaged 1.8% greater in the first two months of 2014 than the 4Q13 mean.  Output was 4.8% greater than in February 2013.  Manufacturing climbed 0.5% in the latest reported month, offsetting drops in energy and construction.

Japan’s index of leading economic indicators fell 4.6 points in February to a reading of 108.5, which was also below December’s 111.9 reading.  The index of coincident economic indicators declined 1.8 points to 113.4, but officials retained an assessment of “improving,” which has been the designation since July 2013.

The Bank of Japan Board began a two-day policy meeting, the first of two meetings this month.  No change in policy settings is anticipated tomorrow. 

Japanese foreign exchange and other international reserve asset holdings declined by $8.86 billion in March following a combined $21.4 billion increase in the first two months of 2014.  Reserves were $25 billion greater than in March 2013.

Australia’s construction purchasing managers index rose 2.0 points in March but at 46.2 remained well below the 50 line of separation between expanding and contracting activity in the sector.  Aussie job ads increased 1.4% last month on top of a 4.7% rise in February.

Taiwanese CPI inflation jumped to 1.6% in March, and WPI deflation shrunk to 1.5% from 4.8%.  Taiwan’s trade surplus widened 24% on month to $1.95 billion in March.

The Sentix measure of investor optimism toward the euro area improved another 0.2 points to a 3-year high of 14.1 in April.  Such ended 2013 with a reading of 8.0.

Swiss consumer prices increased 0.4% in March but were unchanged on year.  Swiss reserves rose to CHF 437.9 billion at the end of last month.

Spanish industrial production was 2.8% higher on year in February, more than doubling from a 1.3% 12-month increase in January.  Czech industrial output growth accelerated to a 12-month increase of 6.7% in February versus 5.5% in January.  Norwegian industrial production advanced by 5.2% between February 2013 and a year later.  Danish industrial output rose 6.0% in the same span. 

U.S. consumer credit arrives today.  More importantly, the Bank of Canada releases results from its quarterly business outlook survey.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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