Dollar Up, Oil and European Equities Down on Final Day of the Quarter

March 31, 2015

The dollar rose overnight by 0.8% against the euro, 0.7% versus the Australian dollar, 0.6% relative to the loonie and Swiss franc, 0.3% vis-a-vis the kiwi and 0.1% against the yuan and sterling.  But the U.S. currency edged 0.1% lower versus the yen.

Oil sank 2.2% to $47.62 per barrel.  Comex gold is steady at $1,185.10 per ounce.

Share prices in Europe so far have lost 1.2% in Great Britain, 0.9% in Germany, 0.8% in Italy, 0.7% in France, and 0.4% in Spain and Switzerland.  Stocks also fell by 1.1% in Japan and 0.9% in China but advanced 1.5% in Indonesia, 0.8% in Australia, 0.7% in Taiwan, 0.5% in South Korea and 0.2% in New Zealand and Hong Kong.

The ten-year Japanese JGB yield firmed two basis points, while the British 10-year gilt slipped a basis point.  The German bund is unchanged.

News is confusing about negotiations regarding a nuclear agreement with Iran and the Greek debt talks.  Neither situation has been settled.

The central bank in Romania cut its key interest rate by 25 basis points for a third straight month and the sixth time in the last eight months.  The rate level now becomes 2.0%.

Japanese housing starts posted a 3.1% on-year drop in February, much less than January’s 13.0% decline and the smallest decrease in eleven months.

Japanese construction orders rose only 1.0% on-year in February, down sharply from gains of 27.5% in January and gains averaging 13.4% in 4Q14.

Japanese motor vehicle sales were 5.3% less in February than a year earlier. 

The People’s Bank of China cut the required downpayment on property purchases to 40% from 70% in an effort to support that sector.

Eurozone unemployment eased 0.1 percentage points to 11.3% in February, which was still higher than expected and down just 0.5 percentage points from February 2014.

Consumer prices in the 19-nation euro area dipped 0.1% on year in March.  This was the fourth straight sub-zero outcome but the smallest of the bunch.  Inflation in the year to March 2014 had been 0.5%.  Core CPI of 0.6% in the latest month was 0.1 percentage point lower than in February and the year-earlier month.  Energy prices sank 5.8%, while all other consumer prices on balance were 0.6% higher.

German retail sales volume dropped 0.5% in February after a 2.3% increase in January.  Compared to a year before, sales were higher by 3.6% in February, 4.3% in January-February combined and 1.6% in 2014.

German unemployment declined by 15K in March after drops of 20K in February, 10K in January, 26K in December and 15K in November.  The jobless rate hit a new low of 6.4% in March after 6.5% in the three prior months and 6.6% in November.  Employment posted on-year growth of 0.9% in February.

Revised British GDP figures for the fourth quarter bumped up quarter-on-quarter growth by a tenth to 0.6%.  Real GDP increased 3.0% between 4Q13 and 4Q14.  The U.K. current account deficit narrowed 8.5% on quarter to GBP 25.3 billion in 4Q14.

British consumer confidence increased three points to +4 in March, the best level since mid-2002.

French consumer spending edged up 0.1% in February instead of dipping 0.1% as forecast.  French producer prices rose 0.7% last month after falling 0.9% in January and were 2.6% lower than their year-earlier level.

Italian unemployment edged up a tenth of a percentage point to 12.7% in February.  Consumer price inflation remained at negative 0.1% in March, and Italy’s PPI tumbled by 2.6% in the year to February. 

Spanish retail sales recorded on-year growth of 2.7% in February, but Greek retail sales dipped 0.1% in the year to January.

Cypriot producer prices posted a 1.7% decline in the year to February, and Danish GDP in 4Q grew 0.5% on quarter and 1.6% on year. 

Czech GDP rose 0.4% in 4Q14 and recorded smaller on-year growth of 1.4%.  Hungary’s PPI fell 3.2% on year, also in February.  Poland’s current account deficit widened almost 11% to EUR 1.97 billion in 4Q14.

Turkish GDP advanced 2.6% in the year to 4Q14.  The Turkish trade deficit widened 8% to $4.66 billion last month.  The South African trade deficit narrowed by a sharp 65% to 8.48 billion rand in February.

In the year to February, retail sales and industrial production in South Korea respectively rose 5.5% and fell 4.7%, while Malaysian producer prices plunged 5.4%.

Scheduled U.S. data releases today include the Case Shiller house price index, the Conference Board’s consumer confidence index and the Chicago and Milwaukee manufacturing PMI surveys.  Vice Chair of the Federal Reserve Fisher overnight said a stronger dollar was not the intended design of monetary policy and that an interest rate hike is likely later this year. 

Canadian GDP in January dipped 0.1% on month but rose 2.4% on year.  Brazilian PPI inflation eased to 2.7% in February from 3.0% the month before.

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

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