Data Factor Heats Up

April 23, 2014

April Flash PMI results are out for the euro area, China and United States.  Other market-moving data released today are Australian consumer prices, U.S. new home sales, Ezone deficit- and debt-to-GDP ratios, and Britain’s industrial trends survey, BOE minutes, and fiscal 2013-14 totals.

The U.S. dollar has jumped 1.0% against its Australian counterpart but shows losses of 0.4% against the Swiss franc, 0.3% versus the yen, and 0.2% vis-a-vis the euro.  The dollar is unchanged relative to the yuan and up 0.3% versus the kiwi and 0.2% against sterling and the loonie.

Japan’s Nikkei-225 advanced 1.1%.  In other equity action around the Pacific Rim, shares fell by 1.0% in Hong Kong, 0.6% in Singapore, 0.2% in Taiwan and South Korea, and 0.1% in China.  Stocks went up 0.7% in both New Zealand and Australia and by 0.5% in India.

European equities are down 0.9% in Italy, 0.7% in France, 0.6% in Germany, 0.3% in Spain and Britain and 0.2% in Switzerland.  U.S. stocks are marginally lower.

Ten-year British gilt and U.S. Treasury yields are off by three and two basis points.  The 10-year JGB is up a basis point, while the German bund is unchanged.

Gold and WTI oil are 0.5% and 0.1% firmer at $1,287.30 per ounce and $101.94 per barrel.

Although rising in April for the first time in four months, China’s flash  manufacturing purchasing managers index showed another sub-50 reading, this time of 48.3 after 48.0 in March and 48.5 in February.

Markit Economics’ flash estimate of the U.S. manufacturing PMI edged downward to 55.4 from 55.5 in March and a 13-month high of 57.1 in February.

Euro area PMI results for April were hopeful and, if sustained, suggest second-quarter GDP growth of around 0.5% not annualized.

  • The composite Ezone reading of 54.0 in April was the best score since May 2011, as services hit a 34-month high and manufacturing recovered to a 3-month peak.
  • Germany recorded better-than-expected readings of 56.3 on the composite PMI, 54.2 for manufacturing, and 55.0 in services.  Germany continues to be the euro area’s main locomotive of recovery.
  • Equally encouraging, the euro area’s peripheral economies continue to show signs of better traction.
  • France is only stagnating.  The composite French PMI of 50.5 was down from a 31-month high of 51.8.  Both services (50.3) and manufacturing (50.9) grew more slowly than expected and than such did in March.

A 0.6% increase in Australian consumer prices between the final quarter of 2013 and the first one of 2014 was the smallest quarterly rise since 2Q13.  On-year inflation of 2.9% remained within the 2-3% central bank target range.  Core inflation was also below the target ceiling.

U.S. new home sales slumped much more than expected in March to 384K from 449K in February and 470K in January.  Sales were 13.3% weaker than a year earlier, providing further evidence that the pace of the housing market recovery has slowed.

U.S. mortgage applications slipped 3.3% last week, and the 30-year fixed rate mortgage rate rose two basis points to 4.49%.

Euroland’s fiscal deficit fell to 3.0% of GDP in 2013 from 3.7% in 2012, 4.1% in 2011 and 6.2% in 2010.  The debt-to-GDP ratio increased to 92.6% from 90.7% in 2012, 87.4%in 2011, and 85.5% in 2010.  Germany’s budget was balanced last year, while the Greek, Irish, Spanish, Italian, and Portuguese deficits remained elevated at 12.7%, 7.2%, 7.1%, 5.0%, and 4.9%, respectively.  Even the French deficit ratio, 4.3%, was excessive by agreed-upon standards.

Minutes from the Bank of England’s April policy meeting confirmed unanimous votes against changing the 0.5% Bank Rate level or the GBP 375 billion limit on quantitative stimulus.  Inflation is not expected to surpass 2.5% in the next 1.5-2 years despite a strengthening recovery.  The jobless rate understates slack in the economy and so must be considered along with other factors in deciding when to tighten.

The U.K. public sector borrowing last fiscal year of GBP 107.1 billion constituted a five-year low. Outstanding debt in March equaled 75.8% of GDP.

The Confederation of British Industries released its April industrial trends survey, showing a reading of minus 1, down from +6 in March.

By a 6-1 vote, the Bank of Thailand chose not to change its 2.0% main interest rate.  A wait-and-see approach followed an easing done in March.

Canadian retail sales increased 0.5% in February.  Total and core retail sales were respectively 3.7% and 3.1% higher than in February 2013.

South African consumer price inflation edged up 0.1 percentage points to 6.0% in March.  South Africa’s index of leading economic indictors fell 0.4% in February, while the index of coincident economic indicators went up 0.1%.

From a four-year low in February of 0.4%, Singaporean CPI inflation accelerated a bit more than forecast to 1.2% in March.  Taiwanese industrial production in March exceeded its year-earlier level by 3.1%.

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


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