Ukraine Crisis Keeps Equities on Offer

April 14, 2014

At Russia’s initiative, the U.N. Security Council debated the Ukraine crisis but made no progress toward fashioning a cool-down there.  Stocks began the week with losses of 1.3% in Australia, 0.6% in Taiwan and New Zealand, and 0.4% in Japan and India.  In Europe, equities are down 1.6% in Russia, 1.7% in Spain, 0.9% in Italy, 0.7% in Germany and France, 0.5% in Britain and 0.4% in Switzerland.  Russia’s ruble is 1.0% weaker against the dollar.

Outgoing Fed Governor Stein asserted that financial stability preservation can be incorporated into the central bank’s existing two-goal mandate without formally expanding the framework.

Holidays will be a factor in coming days.  Tonight is the first night of Passover.  Good Friday/Easter are at the end of the week.

The World Bank/IMF meetings in Washington ended.  Of note there over the weekend, ECB President Draghi and Bank of France Governor Noyer escalated warnings that continuing euro strength escalates the likelihood of ECB easing.

The dollar has risen 0.4% against the euro, 0.3% versus the Swiss franc and kiwi, 0.2% relative to the yuan, and 0.1% vis-a-vis the yen and sterling.  The dollar edged 0.1% lower versus the Canadian and Australian dollars.

The ten-year German bund yield slid a basis point, while its British and Japanese counterparts are unchanged.

Gold advanced 0.5% to $1,325.50 per ounce. Oil eased 0.2% to $103.51 per barrel.

Industrial production in the Ezone rose just 0.2% in February following no change in January.  Energy output followed a 1.8% monthly slump in January with another 1.7% decline in February.  Industrial production was 1.7% stronger than in February 2013 and posted an average 0.4% increase between 4Q13 and January-February.

Ireland’s construction purchasing managers index (PMI) jumped four whole points to 60.2 in March, strongest since January 2006.

New Zealand’s service-sector PMI went up 6.1 points to a reading of 58.3 in March after a 5-point decline in March.

The Rightmove index of British house prices increased 2.6% in March, raising the 12-month rate of climb to 7.3%.

On-year GDP growth in Singapore slowed to 5.1% in 1Q14 from 5.5% in 4Q13.  Quarter-on-quarter growth slowed abruptly to 0.1% from 6.1% in 4Q13.

The Monetary Authority of Singapore (MAS) nevertheless left its monetary policy snug.  The policy subordinates domestic interest rate management to an exchange rate target corridor, whose width, midpoint and slope were left unchanged for the third semi-annual review in a row.  The last change was an increased slope implemented in April 2012.  Authorities noted that a recent decline in total CPI inflation had not been accompanied by lower core inflation.  In fact, core is likely to edge higher in coming months and to remain between 2% and 3% this year.

Italian consumer prices nudged 0.1% higher in March, trimming the 12-month increase to 0.4% from 0.5%.  Finnish CPI inflation slowed to 1.1% in Marchfrom 1.3% in February.

U.S. retail sales data will be released at 12:30 GMT.  A lot more U.S. and international data are scheduled for Tuesday.

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

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