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[IFX Yana]

China Inflation Rebounds Beyond Expectations

Inflation in China increased more than expected in March after easing to a twenty-month low in February, data from the National Bureau of Statistics showed Monday. The latest rise in inflation rate was mainly driven by rising food costs.

Inflation rose to 3.6 percent in March from 3.2 percent in February. Economists had forecast an increase to 3.4 percent. Food inflation accelerated to 7.5 percent from 6.2 percent in the previous month, partly led by a 6.1 percent annual surge in costs of fresh vegetables.

Last month, Premier Wen Jiabao set an inflation target of 4 percent for 2012, the same as that of 2011. Inflation exceeded the target every month last year due to higher food prices.

The government hiked fuel prices for the second time in less than six weeks in March amid mounting pressure from the country's refineries to respond to the rising international crude prices. This might have added to inflationary pressures with China being the second-largest oil consumer after the U.S.

The price index for transportation and communications rose to 0.3 percent, recovering from February's 0.4 percent fall. Utility costs advanced 2.6 percent year-on-year in March.

The statistical office also noted that the house prices increased 2 percent from the previous year. Wen had pledged to continue property market curbs to rein in prices, which, according to him, are still far from "reasonable levels."

In February, the People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points for the second time in three months to boost growth, but refrained from an interest rate reduction fearing inflation surge from possible spike in global fuel prices.

Separately, the statistical office said that the producer price index fell 0.3 percent from March 2011. The outcome was in line with expectations and followed a flat reading in February. Prices have been falling steadily since July last year.

The government targets 7.5 percent growth for the economy this year, lower than the previous target of 8 percent. The economic growth slowed to 9.2 percent in 2011 from 10.4 percent in 2010.

 

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[IFX Yana]

U.S. Dollar Weakens On Bernanke Comments

The U.S. dollar declined against most major currencies in early Asian deals on Tuesday after Federal Reserve Chairman Ben Bernanke said that the economy is "far from recovering from credit crisis."

In a speech at the Federal Reserve Bank of Atlanta Financial Markets Conference, in Stone Mountain, Bernanke suggested that US economy is yet to fully recover from the impact of the global financial crisis.

The greenback that closed yesterday's deals at 1.5894 against the pound and 0.9174 against the franc slipped to a new 1-week low of 1.5933 and a 5-day low of 0.9149, respectively. If the U.S. currency falls further, it may target 1.60 against the pound and 0.91 against the franc.

House prices in the United Kingdom improved in March, according to survey results released by the Royal Institution of Chartered Surveyors (RICS).

The RICS Home Price Balance for March was minus-10, compared to minus-13 in February

Against the New Zealand and Australian dollars the greenback reached fresh 1-weeks lows of 0.8242 and 1.0359 from Monday's close of 0.8218 and 1.0316, respectively. The next downside target level for the greenback is seen at 0.83 against the kiwi and 1.04 versus the aussie.

Activity in Australia's construction sector picked up slightly in March but remained in sharp contraction, according to survey results published today by the Australian Industry Group.

AIG's Performance of Construction index for March was 36.2, an increase of 0.6 points from February.

Also, Australia's business conditions improved modestly in March, along with a jump in confidence, a survey by the National Australia Bank (NAB) showed.

The business conditions index rose to 4 in March from 3 in February. The business confidence index advanced to 3 from 1 in the previous month

The U.S. currency dropped to a 5-day low of 1.3145 against the euro with 1.32 seen as the next downside target level. The pair closed Monday's deals at 1.3107.

Looking ahead, Swiss unemployment rate for March, German trade data, French industrial production and U.K. DCLG house prices for February are due in the European session.

At 10:00 am ET, U.S. wholesale inventories data for February is slated for release.

 

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[IFX Yana]

European Economics Preview: U.K. Producer Price Data Due

Producer prices from the U.K. and final inflation from Germany are the major statistical reports due on Friday, headlining a light day for the European economic news.

The Federal Statistical Office is set to release final Germany inflation data at 2.00 am ET. According to preliminary data, the harmonized index of consumer prices increased 2.3 percent on an annual basis in March, slower than the 2.5 percent growth seen in February.

In the meantime, Statistics Finland is scheduled to publish consumer price figures for March. In February, annual inflation slowed to 3.1 percent from 3.2 percent in January.

At 3.00 am ET, final inflation figures from Spain and industrial production from Hungary are due. Flash estimate published on March 29 showed that EU harmonized inflation in Spain fell to 1.8 percent in March from 1.9 percent.

Half an hour later, Dutch trade figures for February are due.

At 4.00 am ET, Italy's statistical office is slated to release industrial production for February. Economists forecast production to drop 0.5 percent month-on-month after easing 2.5 percent in January.

At 4.30 am ET, U.K. producer price data is due from the Office for National Statistics. Input price inflation is seen easing to 4.8 percent in March from 7.3 percent in February. At the same time, output price inflation is seen at 3.5 percent, down from 4.1 percent in the previous month.

Italy's final inflation figures are due from the statistical office Istat at 5.00 am ET. According to preliminary estimate, inflation, measured by the harmonized index of consumer prices, rose to 3.8 percent in March from 3.4 percent in February.

 

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[IFX Yana]

Bank Of Korea Cuts 2012 GDP Growth Forecast

South Korea's central bank on Monday lowered its forecast for economic growth this year due to weaker-than-expected world economic growth and higher oil import prices.

Bank of Korea said it expects the gross domestic product to rise 3.5 percent this year, weaker than the 3.7 percent growth forecast in December. For 2013, growth is projected at 4.2 percent.

Export growth is forecast to slow somewhat, owing to the cooling of world trade growth amid recession in the euro area, the bank said. Export growth is expected to ease to 4.8 percent this year from 10.5 percent last year. The latest estimate is also slightly weaker than the December forecast of 5 percent.

On the other hand, private consumption is expected to accelerate to 2.8 percent from 2.3 percent in 2010. This was, nonetheless, lower than the December forecast of 3.2 percent due mainly to deteriorating terms of trade and sluggish fourth quarter performance last year.

The rate of increase in the headline consumer price index is forecast to stand at 3.2 percent in 2012, lower than the previous forecast of 3.3 percent. For 2013, headline CPI is forecast to rise 3.1 percent.

The CPI excluding agricultural and petroleum products is projected to rise 2.6 percent in 2012, slower than earlier forecast of 3.3 percent. The index excluding food and energy is expected to rise 2.2 percent, also down from 2.7 percent forecast earlier.

The unemployment rate is projected at around 3.3 percent for 2012 and 2013, lower than last year's 3.4 percent.

 

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[IFX Yana]

European Economics Preview: German ZEW Survey, UK Inflation Data Due

Economic sentiment from Germany and consumer price inflation from the U.K. are the major reports due on Tuesday.

At 2.00 am ET, European Automobile Manufacturers' Association, or ACEA is slated to release new car registrations for March. Registrations were down 9.7 percent year-on-year in February.

At 4.30 am ET, the Office for National Statistics is slated to release U.K. inflation data for March. Annual inflation is expected to remain steady at 3.4 percent. At the same time, retail price inflation is seen easing to 3.6 percent from 3.7 percent in February.

Spain's government aims to raise between EUR 2 billion and EUR 3 billion from the auction of short-term bills. Spain plans to issue 12 and 18 months Treasury bills.

Germany's ZEW economic sentiment survey results are due at 5.00 am ET. Economists forecast sentiment to drop to 19 in April from 22.3 in March.

In the meantime, Eurostat is set to release final HICP figures for March. According to flash estimate, Eurozone annual inflation fell to 2.6 percent in March from 2.7 percent in February.

Italy's current account data for February is also due at 5.00 am ET. The current account deficit totaled EUR 7.95 billion in January.

 

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[IFX Yana]

Eurozone Current Account Swings To Deficit In February

The Eurozone current account unexpectedly logged a seasonally adjusted deficit of EUR 1.3 billion in February, the European Central Bank said Wednesday. Economists were expecting the surplus to fall to EUR 2 billion from EUR 3.7 billion surplus seen in January.

The surplus in goods account fell to EUR 1.5 billion in February from EUR 3.3 billion last month. Likewise, the balance in income declined sharply to EUR 1.2 billion from EUR 4.2 billion. Meanwhile, the surplus in services rose to EUR 4.7 billion from EUR 4.1 billion.

The deficit in current transfers totaled EUR 8.7 billion compared to a shortfall of EUR 7.9 billion a month ago.

The 12-month cumulated seasonally adjusted current account registered a surplus of EUR 2.1 billion in February, which was less than 0.1 percent of euro area GDP, compared with a deficit of EUR 18.1 billion a year earlier.

 

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[IFX Yana]

European Economics Preview: Spanish Debt Auction In Focus

Spanish debt auction is set to dominate the European economic news on Thursday amid widespread concerns that the country may be forced to seek an international bailout after its borrowing costs surged close to levels widely seen as unsustainable at an auction on April 11.

At 3 am ET, the Hungarian Central Statistics office is expected to release the data on average gross wages for the month of February. Economists expects an annual increase of 6 percent.

Unemployment data from the Netherlands is due at 3.30 am ET. At 4 am ET, Italian statistical office is expected to publish industrial orders' statistics for February. Orders are forecast to decline 6.2 percent year-on-year and 1.1 percent month-on-month amid waning demand from Europe.

At 4.30 am ET, Spain is set to auction around EUR 2.5 billion in two and 10-year bonds. The yield on benchmark 10-year bond rose to above 6 percent on April 11, but fell back on Tuesday.

France is scheduled to auction securities including 2017 notes and 2018 inflation-linked debt for a maximum target of EUR 11 billion at around 4.50 am ET and 5.50 am ET. Markets are also keen on France as it comes just days ahead of the first round of Presidential elections on Sunday.

Industrial production and producer price index from Poland is expected at 8 am ET. Production is forecast to rise 4.4 percent annually in March, while producer price inflation is seen moderating to 4.8 percent.

Flash consumer sentiment from Eurozone is slated for release at 10 am ET. The confidence index is expected to stay almost steady at -19. Consumer confidence index rose to -19.1 in March from -20.3 in the previous month.

 

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[IFX Yana]

European Economics Preview: German Ifo Business Confidence Forecast To Fall

Business confidence from Germany and retail sales from the U.K. are the major reports due on Friday.

At 2.00 am ET, the Federal Statistical Office is set to release German producer prices for March. Producer price inflation is seen easing to 3.1 percent in March from 3.2 percent in February. On a monthly basis, producer price inflation is seen at 0.4 percent.

Dutch consumer spending and consumer confidence are due from Statistics Netherlands at 3.30 am ET.

The Munich-based Ifo institute is slated to publish German business confidence survey results at 4.00 am ET. The business sentiment index is seen easing to 109.5 in April from 109.8 a month ago. The current assessment index is expected to fall to 117.

Half an hour later, U.K. retail sales figures are due. Economists forecast retail sales to rise 0.4 percent month-on-month in March after easing 0.8 percent in February.

Poland's net consumer price inflation data is due at 8.00 am ET. Annual inflation is seen falling to 2.5 percent in March from 2.6 percent in February.

 

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[IFX Yana]

European Economics Preview: Eurozone PMI Data Due

Flash results of Purchasing Managers' survey from major Eurozone economies are due on Monday.

At 2.45 am ET, the French statistical office Insee is scheduled to publish April business confidence survey results. The index is expected to remain unchanged at 96.

Markit Economics is set to publish Purchasing Managers' survey data at 3.00 am ET. The French manufacturing PMI is seen rising to 47.2 in April from 46.7 a month ago. Likewise, the services PMI is forecast to rise to 50.2 from 50.1 in March.

Half an hour later, German flash PMI figures are due. The manufacturing PMI is expected to rise to 48.9 from 48.4 and the services PMI to improve to 52.4 from 52.1.

At 4.00 am ET, Markit is expected to issue Eurozone flash PMI. The composite PMI is seen rising to 49.3 in April from 49.1 a month ago. In the meantime, Italy's consumer confidence for April is due.

Eurostat is slated to release Eurozone government debt-GDP data for 2011 at 5.00 am ET.

 

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[IFX Yana]

China Leading Index Suggests Continued Slowing Of Economy

The Conference Board's leading indicator of China's economic activity went on to support continued slowing of the economy, with significant downside risks remaining.

The Conference Board on Tuesday said that its leading economic index increased 0.8 percent in March to 230.6, slower than 1 percent increase in February and a 2.1 percent increase in January.

"While the China LEI in March continued to increase and its six-month growth rate remained steady, this month's reading supports a continued slowing of the economy," Conference Board's resident economist Andrew Polk said.

According to the economist, the volatility among leading indicators points to significant downside risks. Meanwhile, the diffusion index, which measures the balance among the rising and falling index components, also showed that risks are tilted towards the downside, highlighting the increasing fragility of China's economy, Polk said. The coincident economic index, which measures current economic activity, increased 0.6 percent in March to 219.1, following a 4 percent increase in February and a 3 percent decrease in January.

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[IFX Yana]

European Economics Preview: U.K. GDP Data Due

Quarterly national accounts from the U.K. is the major data that is set to dominate the scene on Wednesday.

Spain's statistical office INE is set to publish producer prices for March. Producer prices had increased 3.4 percent year-on-year in February.

At 4.00 am ET, the European Central Bank is scheduled to release bank lending survey results. In the meantime, Norges Bank's first quarter bank lending survey data is due.

Poland's retail sales and unemployment reports are also due at 4.00 am ET. The jobless rate is seen falling to 13.4 percent in March from 13.5 percent in February. Retail sales growth is expected to drop to 10.5 percent from 13.7 percent a month ago.

The Office for National Statistics is scheduled to release quarterly national accounts for the first quarter. Economists forecast the U.K. economy to expand 0.1 percent sequentially after contracting 0.3 percent in the fourth quarter of 2011.

In the meantime, the U.K. index of services for three months ended February is due. Services output is expected to rise 0.5 percent from the prior three months.

At 5.30 am ET, Germany's long-term debt auction results are due. The government aims to raise EUR 3 billion from the issue of bonds maturing on July 2044.

The Confederation of British Industry is scheduled to release Industrial Trends survey data at 6.00 am ET. The order book balance is seen at -6 percent in April compared to -8 percent in March.

 

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[IFX Yana]

European Economics Preview: Eurozone Economic Sentiment Due

Economic sentiment data from Eurozone is the major report on tap for Thursday, an otherwise light day for European economic news.

Consumer confidence survey results from Statistics Finland is expected at 2 am ET.

At 3.15 am ET, Sweden's National Institute of Economic Research is due to release the economic tendency survey report for April. At 3.30 am ET, Swedish producer price figures from Statistics Sweden is slated for release.

At 4 am ET, Italian business sentiment data is due. Economists expect the sentiment index to remain unchanged in April. The Norwegian Labor and Welfare Organization is also due to announce the unemployment figures for this month at the same time.

The British Bankers' Association is scheduled to publish mortgage approvals data for the month of March at 4.30 am ET. The number of mortgage approvals are expected to rise to 34,000 during the month.

Euro area economic sentiment survey results from the European Commission is slated for release at 5 am ET. Economic confidence index is expected to fall only slightly to 94.2 in April from 94.4 in March.

Italy is auctioning EUR 8.5 billion in six-month treasury bills at around 5 am ET.

The Confederation of British Industry is due to publish the distributive trades survey at 6 am ET. German preliminary inflation data is expected at around 8 am ET.

 

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[IFX Yana]

European Economics Preview: German GfK Consumer Confidence Due

Consumer confidence survey results from Germany and consumer spending from France are due on Friday.

At 2.00 am ET, German GfK consumer confidence is due. The forward-looking indicator is forecast to remain unchanged at 5.9 points in May.

In the meantime, Destatis is slated to publish German import prices for March. Import price inflation is seen slowing to 3.3 percent annually from 3.5 percent in February.

At 2.45 am ET, the French statistical office Insee is scheduled to release consumer spending and producer price figures. Economists forecast consumer spending to fall 1.9 percent month-on-month in March. At the same time, producer price inflation is expected to drop to 4 percent in March from 4.3 percent in February.

At 3.00 am ET, a slew of statistical reports are due from Spain. Spain's EU harmonized inflation is seen unchanged at 1.8 percent in April. For the first quarter, the jobless rate is forecast to rise to 23.8 from 22.8 percent in the prior quarter.

Half an hour later, Statistics Sweden is scheduled to issue retail sales and trade balance for March. Retail sales are expected to drop 0.3 percent month-on-month after rising 1.2 percent a month ago. Economists predict the trade surplus to rise to SEK 7 billion from SEK 5.9 billion in February.

At 4.00 am ET, Italy's retail sales figures are due. Retail sales are forecast to drop 0.2 percent month-on-month in February after rising 0.7 percent in January. In the meantime, Norway's retail sales data is also due.

Italy plans to raise a maximum of EUR 6 billion from BTP auction. Results are due at 5.10 am ET.

 

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[IFX Yana]

UK House Prices Increase For Second Month

House prices in the UK rose for a second consecutive month in April led by London, a survey by Hometrack revealed Monday.

Home prices at national level rose 0.1 percent month-on-month in April after 0.2 percent gain in March, the survey report said. The strongest price gain was reported in London, with a 0.3 percent increase.

"Conflicting reports over the strength of the economy and renewed fears over the prospects for the Eurozone could over the coming months impact on buyer confidence," said Richard Donnell, director of research at Hometrack. "As a result we expect price rises to flatten out as we move into the summer."

Meanwhile, the supply of properties rose 4.8 percent in April, faster than a 3.6 percent increase in March.

 

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[IFX Yana]

Eastern European Business Climate Index of Foreign Direct Investors Soars in April - Oekb

The OeKB Central and Eastern European Business Climate index of FDI soared to 24 points from 14 in Jan

The economic outlook gauge swung 21 points higher to 11 in April from -10 in Jan.

Russia's business climate gained 13 points to 58 and Romania's doubled to 28, while Ukraine's reading fell eight points to 26 amid continued political tension.

Hungary was in negative territory even as its business climate improved to -9 from -31.

Quotes

"The mood among direct investors for the entire central Europe region has improved noticeably since January. For the coming 12 months a pick-up in the economy and thus a rise in Austrian exports to CEE is expected

OeKB survey

 

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[IFX Yana]

European Political Situation Drags Japanese Equities and Yields Lower

Results of Greek and French elections fuelled suspicion about EU's ability to implement tough austerity and dragged Japanese markets down by 266 pts of 2.80 pct to 9,113.57. Results of US non farm payrolls also added further woes to investors concerned about global growth prospectus. Japanese yields for 10 and 20 yr yields hit their lowest level since October 2010. South Korea's Kospi also shed 1.70 pct at market open on same worries

 

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[IFX Yana]

Now Is Not the Time to Abandon Flexible Inflation Policies says Boc's Mark Carney

Now is not the right time to part with flexible inflation policies with "low -fo-long" said BoC's Carny to FT

He said that perusing a policy of temporary higher inflation is an uncertain and extreme response

He did not mention any C bank while referring to targeting infaltion

Quotes

"Moving temporarily to a higher inflation target risks un-anchoring inflation expectations and squandering the hard-won gains of entrenched price stability"

"Higher and more uncertain inflation raises risk premiums and real interest rates, and worsens debt dynamics,"

"Central banks are most effective when they operate with clear and stable objectives."

"The pursuit of temporarily higher inflation could only work if policy were anchored to a new target, such as nominal gross domestic product - total output at market prices, unadjusted for inflation,"

BoC's Mark Carney

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[IFX Yana]

China Expands Qfii Investment Products, Relax Rules

Chinese authorities have relaxed rules for QFII investor by allowing them to apply for separate QFII status while remaining under the same financial group which will enable number of funds for investment. The scheme will now expand to allow more investments in structure products. Authorities will also relax the ratio for investing in bonds, stocks and cash

 

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[IFX Yana]

Business Investment stalled French Economy to Zero Growth in Q1 As Expected

French preliminary GDP growth was reported neutral in Q1. Business investment was down by 1.4 pct while household and Public investment declined by 0.2 pct and 0.1 pct each. Household consumption (+ 0.2 pct) and Public consumption (+0.5 pct) however supported the economy. Economists also expected a zero growth for the economy however some expected it to decline by 0.3 pct as well. Other European economies going to report their GDP growth are Germany (poll 0.1 pct q/q), Italy (poll -0.6 pct q/q ), Dutch (poll -0.2 pct q/q). Euro zone as a whole expected to report shrinkage of 0.2 pct in q/q terms

 

 

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[IFX Yana]

Greece Worries Hits Nikkei, S. Korea's Kospi Tumbles

Worries about possibility of Greece leaving euroz one hit Nikkei hard as Japanese Benchmark Index lost 1.1 pct at mkt close. South Korea's KOSPI tumbled very sharply by 3.08 pct at mkt close with losers like Samsung Electronics (- 6.2 pct) amd SK Hynix (-8.9 pct). IMF's Lagarde said yesterday that Greece could exit in orderly fashion, but even that could have impact beyond imagination because of possible contagion

 

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[IFX Yana]

Japan's Noda Wants Bold Action from Boj, Shirakawa Remains Cautious

Japan's PM Noda said that BoJ should take bold and appropriate action to beat deflation and tackling stronger yen. However BoJ's Shirakawa remained cautious on the issue and said it quite clearly that monetary policy alone can't beat deflation and could backfire with unwarranted consequences in the markets. However he admitted that Japanese economy in severe state and BoJ would do utmost to ensure economic growth and price stability. Both of them where speaking at lower house parliamentary session on Japan's social welfare and tax reforms.

 

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[IFX Yana]

Germany -Euro Zone Worries to Last for another 2 Years says German Fin Min

German's Schaeuble said that euro zone market turmoil surrounding the euro zone crisis could last another 12 to 24 months. He also urged Greeks to decide whether they wished to stay in the single currency.

Quotes

"It's up to Greek politicians to explain the reality to their people and not make false promises,"

"We want Greece to stay in the euro but meet its commitments and that's a decision that's up to the Greeks."

German Finance Minister Wolfgang Schaeuble.

 

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[IFX Yana]

Uk Banks can Tackle Contagion from Potential Greek Exit says Michael Cohrs

BoE's Michael Cohrs said that UK banks are well prepared to tackle any potential contagion from Greek crisis.

Quotes

"They have thought about their direct exposures to Greece and they have marked them to appropriate levels, their liquidity is strong and they have enough capital to withstand shocks from Greece,"

"If it goes further it's not clear, and that is why we have been encouraging them to raise more capital because nobody knows where it will stop or it won't stop,"

"I really want to hammer home this point; it was why we're urging British financial institution to prepare themselves and strengthen their capital,"

Published:

 

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[IFX Yana]

China to Speedup Infra-Investments to Boost Growth

China is planning to speed up infrastructure related investment in order to push up growth in construction without creating bubble in property sector according to newspaper reports. It has asked parties to submit project proposals by end of June and even considering advancing projects. Paper also said that infrastructure investment related projects are approved much faster this year.

 

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[IFX Yana]

Uk's Clegg Ready Sail With the Wind, Favors Growth Over Austerity - Ft

UK's Deputy PM Nick Clegg is ready to move with new idiom among European politician by siding with growth based austerity according to his interview with FT. The move will focus credit infusion housing and infrastructure and would also focus on small businesses. However, finance ministry doesn't fully share views on proposed "massive amplification" of existing credit-easing schemes.

Quotes

"I think there are people about who will be nervous - even neurotic - about any kind of innovation in this area for fear that it somehow would be criticised by people in the markets,"

"We're not austerity fanatics for the hell of it - we've actually got some very creative initiatives on growth, which we've already launched, which can be supplemented and will be supplemented,"

Nick Clegg to FT.

 

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