Data Focus on Europe

April 29, 2014

European stocks have risen 1.5% in Italy, 1.2% in Germany, 0.9% in Spain, 0.5% in Britain and Switzerland and 0.5% in France.  Equities in the Pacific Rim were mixed, with gains of 1.1% in China, 1.5% in Hong Kong, 0.7% in Taiwan and 0.6% in New Zealand but losses of 1.0% in Japan, 0.9% in Australia, 0.7% in India and 0.2% in South Korea and Singapore.

The dollar is unchanged versus the Swiss franc and Chinese yuan, up 0.3% against sterling and 0.2% relative to the yen, but down 0.4% vis-a-vis the loonie, and 0.1% against the kiwi, Aussie dollar and euro.

The ten-year British gilt and German bund yields have climbed three and one basis points.

Gold slipped 0.7% to $1,289.60 per ounce.  West Texas Intermediate oil is 0.4% higher at $101.27 per barrel.

German consumer confidence held at an 8.5 reading for a third straight month in May.

French consumer confidence fell back in April to February’s reading of 85 after touching 88 in March.

Italian business sentiment improved by a larger-than-forecast 0.4 points to 99.9 in April.  Italian retail sales fell 1.0% on year in February after a 0.9% 12-month drop recorded in January.

Swedish consumer confidence unexpectedly dropped 0.6 points to 99.0 in April.

Portuguese business sentiment ticked up to -0.2 in April from -0.3 in March, while the consumer confidence index rose 0.4 to negative 30.3.

Euro area economic sentiment unexpectedly fell by 0.5 points to a two-month low of 102.0 in April.  Industrial sentiment worsened 0.3 points.  Services fell by a full point.  Retail edged down by 0.1 to -2.6.  Construction dropped 1.6 to negative 30.3.  The business climate index fell to a 3-month low of 0.27 from 0.40 the month before.

Euroland money and credit data were again weak in March.  M3 money was only 1.1% higher than in March 2013, resulting in a 1Q14-on-1Q13 advance of 1.2%.  Loans to the private sector posted a 2.5% on-year decline.  Private loans fell by 2.2%, including a drop of 3.0% in lending to firms and a rise of just 0.5% in mortgage lending.  Marketable instruments, which comprise the difference between M2 and M3, posted a 13.6% plunge, two percentage points greater than the drop in February.

The first reading of British 1Q14 GDP revealed growth of 0.8% on quarter and 3.1% on year, up from 2.7% 4Q13-on-4Q12 expansion.  Last quarter, production, services, and construction respectively rose by 0.8%, 0.9%, and 0.3% from the final quarter of 2013.  The U.K. index of services rose 0.2% on month and 2.7% on year in February.

Among reporting German states, CPI inflation in Saxony rebounded to 1.3% in April from 0.9%; to 1.3% in Brandenburg and Hesse from 1.0%; to 1.7% in North Rhine Westphalia from 1.4%; to 1.4% in Baden Wuerttemberg from 1.4%; and to 1.0% from 0.9% in Bavaria.  April inflation rates were thus similar to those in February, a development that ECB officials were anticipating.  Overnight remarks by ECB President Draghi indicated that any imposition of quantitative easing remains some time away.

Icelandic CPI inflation edged up 0.1 of a percentage point to 2.3% in April.  But Belgian CPI inflation slowed to 0.6% from 0.9%.  Greek producer prices climbed 0.4% in March, trimming their 12-month decline to 2.0% from 3.5%.

Austria’s purchasing managers index rose to a two-month high of 51.4 in April following readings of 51.0 in March, 53.0 in February and 54.1 in December and January.

Spanish unemployment averaged 25.9% last quarter, up from 25.7% in 4Q13.

The Conference Board U.S. consumer confidence index, the Case-Shiller home price index, and weekly U.S. chain store sales data arrive today.  Tomorrow sees the ADP estimate of U.S. private-sector jobs and the FOMC policy announcement (but no press conference).  The Bank of Japan is meeting and will release its semi-annual Outlook tonight.  A Hungarian interest rate decision from Megyar Nemzeti Bank is due later today.

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

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