Abundance of Data, Some Central Bank Decisions, and a Saudi-Led Air Attack on Islamic Rebels in Yemen

March 26, 2015

In quickening activity, the dollar lost 0.8% overnight against the Swissie, 0.6% relative to the yen and loonie, 0.5% vis-a-vis the kiwi, 0.4% versus sterling, 0.3% against the euro, and 0.2% versus the Australian dollar.  The yuan slipped 0.1%.

After Wednesday’s North American sell-off, stocks in the Pacific Rim and Europe are significantly lower.  Stocks fell by 2.3% in India, 1.6% in Australia, 1.4% in Japan, 1.0% in South Korea, 0.7% in Indonesia, 0.5% in Taiwan, and 0.4% in New Zealand.  Equities closed marginally higher in Singapore and China but have so far lost 2.5% in Greece, 1.5% in Switzerland, 1.4% in Germany and Italy, 1.3% in France, 1.0% in Great Britain and 0.7% in Spain.

The ten-year British gilt yield advanced by six basis points, but its German and Japanese counterparts are unchanged at 0.22% and 0.32%.

The aforementioned Saudi-led air strike on Yemen rebels gave bumped oil above the $50 per barrel threshold; at $51.14 such has risen 3.9%.

Comex gold also advanced, gaining at solid foothold above $1200 at $1211.00 per ounce, a net gain of 1.2%.

Bangko Sentral ng Pilipinas left the Filipino overnight borrowing rate unchanged at 4.0% as expected.  It has been at that level since hikes of 25 basis points each in July and September of 2014.

The Central Bank of the Republic of China (Taiwan) kept its discount rate at 1.875% after the latest quarterly policy review.  Successive 12.5-basis point hikes were engineered in June, September and December 2010 and the first two meetings of 2012, but policy has not been modified at the subsequent fifteen meetings.

The Czech National Bank retained a 0.05% two-week repo interest rate and extended its policy of keeping the koruna per euro exchange rate close to 27.0.

Japanese stock and bond transactions generated a JPY 2.29 trillion net capital outflow last week, ten times greater than in the prior week.  Japan’s fiscal year ends on March 31.

Hong Kong’s trade deficit narrowed 3.1% on month to HKD 35.88 billion in February.  The Thai  trade balance swung to a $390 million surplus last month from a deficit of $459 million in January.  There was also a surplus in December, totaling $1.59 billion.

South Korean consumer confidence unexpectedly fell two points to a 101 reading in March.  Industrial production in Singapore rebounded 4.1% in February from a 4.7% plunge the month before, reflecting Lunar New Year distortions, but was 3.6% weaker than in February 2014.

Consumer confidence in Germany climbed another 0.3 points to a 174-month high of 10.0 in April, a full point higher than its level three months prior.  Real wages in Germany went up 1.7% in 2014, most in at least six years, as nominal wage growth of 2.6% outpaced price inflation of 0.9%.

French GDP growth in the final quarter of 2014 was confirmed at just 0.1% versus 3Q and 0.4% on year.  GDP grew 0.4% in 2014, same as in 2013.  The government deficit last year equaled 4.0% of GDP.  Outstanding debt last quarter amounted to 95% of French GDP.

Eurozone money but not credit growth accelerated further in February.  M3 was 4.0% greater than in February 2014 and posted an on-year increase in December-February of 3.8%, up from a 4Q14-over-4Q13 rise of 3.1%.  M1 money growth accelerated to 9.1% from 8.9% in January and 7.9% in December.  Marketable instruments, the difference between M3 and M2, rebounded to a 4.0% on-year rise and accounted for two-thirds of the January to February acceleration in M3.  Total credit was unchanged on year, same as January’s result.  Mortgage lending was also flat in the on-year comparison, while loans to non-financial companies contracted by 0.7%.

Swedish producer prices jumped 1.1% last month, raising the 12-month rate of increase all the way to 1.9%.  Sweden’s trade surplus widened to SEK 4.6 billion last month from SEK 3.3 billion in January.

British retail sales volume climbed 0.7% in February, twice expectations, and were a healthy 5.7% greater than a year before.  Core sales that exclude autos also went up 0.7% on month and were up 5.1% on year.

The Conference of British Industries March survey of distributive trends produced a 17-point recovery in the overall index to a reading of +18.  Analysts were looking for a score close to 30, and the March level was the lowest since last June other than the plunge to a 15-month low seen in February.

European Union motor vehicle sales in February recorded an 8.3% on-year increase after gaining 7.6% in the prior month.

South African producer price inflation slowed to 2.6% last month from 3.5% in January.

U.S. jobless insurance claims fell by 9K to 282K last week.  The latest 4-week average of 297K is similar to 294.5K in the four weeks to February 21 and the 296K average over the past twenty weeks.

The Kansas City Fed manufacturing index will be release later today.  So too will be Markit Economics preliminary estimates for the U.S. services and composite purchasing manager indices in March.  Central banks in South Africa and Mexico make interest rate announcements.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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