Most Equities Have Firmer Tone

April 4, 2016

Friday’s post-jobs report rise in stocks has carried into Monday’s session.  U.S. futures are indicated higher.  Stocks rose 0.5% in India, 0.6% in Singapore and New Zealand and 0.3% in South Korea.  Japan’s Nikkei slipped 0.3%, and Taiwan, China, and Hong Kong were closed, observing the Ching Ming Festival.  In Europe, share prices have risen 1.1% in France, 1.0% in Spain and Germany, 0.8% in the U.K. and Switzerland and 0.4% in Italy.

Greek stocks fell 1.8%, however, after IMF Managing Director Lagarde indicated that a loan agreement is still “a distance away” with that country.

Dollar/yen is unchanged, and the U.S. currency has slipped 0.2% versus sterling.  Otherwise, the dollar is 0.8% stronger against the Australian and New Zealand dollars, up 0.3% relative to the euro and Swiss franc, 0.2% higher vis-a-vis the loonie and up 0.1% against the yuan.  The ruble and rand lost ground.  In India where an 8-month high in the manufacturing PMI of 52.4 was reported for March after back-to-back readings of 51.1 in January and February, the rupee climbed to its best level of 2016.

Ten-year sovereign debt yields rose 3 basis points in the U.K., but slipped two and one basis points in Japan and Germany.

West Texas Intermediate oil eased 0.2% to $36.72 per barrel.  Metals are softer, including drops of 0.8% in copper and 0.4% in gold to $1,218.05 per troy ounce.

Euroland’s jobless rate ticked down another tenth of a percentage point but at 10.3% in February, it still exceeds the U.S. Great Recession high of 10.0% hit in October 2009.  The eurozone jobless rate was 11.2% in February 2015 and 11.8% in February 2014.

Producer prices in the euro area fell 0.7% on month in February and posted a 12-month drop of 4.2% after declines of 3.0% in the prior two months.  Energy prices swooned 2.1% on month and 12.8% on year.  All other producer prices collectively fell 0.2% from January and 0.8% from a year earlier.

The ECB managing director and chief economist, Praet, warned that the central bank is likely to ease again and forcefully.

The Sentix Investor Confidence index for Euroland recovered to a reading of 5.7 in April after falling a whole point to 5.0 in March.  The index was as high as 15.7 in December at 20.0 in April 2015.

Britain’s construction purchasing managers index stayed unchanged in March at February’s 10-month low of 54.2.

Australian retail sales stagnated in February for the second time in three months.  Sales were 3.7% higher than a year earlier, down from on-year growth of 4.0% in December and January.

Aussie building permits increased 3.1% in February, less than half January’s decline of 6.6%, and posted a 9.0% drop from the year-earlier level.

Turkish PPI inflation slowed to a 1-year low of 3.8% in March from 4.5% in February and 5.9% in January.  CPI inflation in Turkey decelerated to 7.5%, a 7-month low, after 8.8% in February and 9.6% in January.

The global manufacturing PMI compiled by J.P. Morgan printed at 50.5 in March, connoting near stagnation and lying between readings of 50.0 for February and 50.9 in January.

Mexico’s manufacturing PMI ticked up 0.1 to 53.2, a 10-month high.

Japan’s monetary base was 28.5% higher than a year earlier in March.  Current account balances which banks hold with the BOJ were 89.6% higher.  Both data series have been slowing.  The base rose 34.0% on average in 2015, down from 43.2% in 2014.  Current account balances increased 52.8% in 2015, down from 89.9% in 2014 and 108.8% in 2013.

Neel Kashkari, the new Minneapolis Fed President, is rattling the banking industry again.  He seeks even tougher restraints on the largest institutions, including possibly breaking them up.

Scheduled U.S. data releases today are the New York area PMI, the so-called NAPM index, and factory orders.

Copyright 2016, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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