May Day 2015

May 1, 2015

Many markets particularly in Europe are shut for May Day.  This has held down the usual flood of manufacturing PMIs on the first day of the month. 

Japanese inflation picked up for the first time in almost a year, but Japan’s factory purchasing managers index edged below the no-change threshold.

The British PMI printed significantly below market expectations.

The dollar lost 0.5% against the euro and Swiss franc but appreciated by 0.5% vis-a-vis the kiwi and 0.3% against the yen, Aussie dollar, Canadian dollar, and sterling.  The yuan is steady.

Share prices fell by 0.8% in India, 0.7% in South Korea, and 0.4% in Indonesia but firmed 0.4% in Australia and 0.1% in Japan and New Zealand.

The 10-year Japanese JGB yield rose two basis points, while the 10-year British gilt yield fell two bps.  A higher Treasury yield is indicated in the futures.

Gold and oil slid 0.2% to $1,180.30 per ounce and $59.50 per barrel.

The Bank of Mexico left its overnight lending rate at 3.0%, its level since a 50-basis point cut last June.

The Bank of Russia slashed its repo rate by 150 basis points to 12.5%.

Core Japanese CPI inflation (excluding fresh food and the effect of the April 2014 sales tax hike) rose to 0.2% in March from 0.0% in February.  Energy prices posted a 1.7% month-on-month advance.  Tokyo core CPI inflation doubled in April to 0.4%.

Japan’s jobless rate fell to 3.4% in March from 3.5% in February and 3.6% in January.  The job offers to seekers ratio stayed at 1.15, but on-year employment growth slowed to 0.3% from 0.6%.

Real household spending advanced 2.4% on month in March, posting a smaller-than-forecast on-year decline of 10.6%.  Real disposable income fell by 1.1% on year.

Japanese labor cash earnings growth failed to accelerate as expected in March, instead holding at just 0.1%.  Real cash earnings slumped by 2.6%.

Japan’s manufacturing purchasing managers index fell 0.4 points to 49.9, the first sub-50 result since April 2014.  Production and orders contracted.  Export demand hit a 10-month low in spite of the cheap yen.  Input price inflation was very low.

Japanese stock and bond transactions generated a JPY 796 billion net capital inflow last week, reversing a JPY 769 billion outflow in the week of April 17.

The British manufacturing PMI fell 2.1 points to a 7-month low in April, and the March reading was revised 0.4 points lower.  This news and this past Tuesday’s weak GDP report that saw GDP rise at the slowest pace since the final quarter of 2012 come less than a week before next Thursday’s general election.  Polls suggest a hung parliament will result.

British M4 money fell by 0.6% in the year to March.  Mortgage applications, according to the Bank of England, totaled 61.34K that month, down from 61.52K in February.

The Dutch manufacturing PMI climbed 1.5 points to a 5-month high of 54.0 in April, easily beating street estimates.

The Irish manufacturing PMI fell a full point to a 3-month low but, at 55.8, still conveys very buoyant growth.

Although China is shut today, the two government-compiled PMI surveys were released in Beijing.  The manufacturing index held steady at 50.1, while the non-manufacturing PMI slid 0.3 points to a score of 53.4.

Australia’s manufacturing PMI recovered from readings of 45.4 in February and 46.3 in March to a 3-month high of 48.0 in April, but it was below 50 for the fifth straight month.  Sub-indices for new business and production also were less than 50, thus conveying shrinkage.

Producer prices in Australia rose 0.5% in the first quarter.  Set against a 0.9% quarter-over-quarter advance a year earlier, on-year PPI inflation slowed to 0.7%.  The domestic PPI inflation rate was just 0.4%. 

South Korea’s trade surplus of $8.39 billion in April was little changed from the level in March.  South Korean consumer prices rose 0.4% in the year to April.  Thai consumer prices fell 1.0% in the year to April, while producer prices in that economy dropped by 3.4%.

U.S. data arriving today include the manufacturing PMI survey, construction spending, the U. Michigan consumer sentiment index and motor vehicle sales. 

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

Tags: , ,


Comments are closed.