“U.S. wholesale inventories rose in March, fueled by increased stocks of cars and machinery which have provided support for economic growth early in the year, but wholesale sales posted the biggest fall in four years.
The Commerce Department said on Thursday wholesale inventories rose 0.4 percent, just above the median forecast in a Reuters poll for a 0.3 percent gain….”
Comments »“U.K. industrial production rose more than economists forecast in March as cold weather boosted demand for electricity and gas.
Output increased 0.7 percent from February, when it gained 0.9 percent, the Office for National Statistics said today in London. The median forecast of 31 economists in a Bloomberg News survey was for a gain of 0.2 percent. Electricity and gas surged 2.4 percent, the most since October. The data also showed that production increased 0.2 percent in the first quarter, matching an estimate in last month’s gross domestic product report.
Britain’s economy grew 0.3 percent in the three months through March and surveys suggest that the recovery may have continued into this quarter. Bank of England policy makers meeting today will probably maintain their target for asset purchases at 375 billion pounds ($583 billion) as they weigh risks to the rebound from the contraction in the fourth quarter.
The data “suggest that the economic recovery gained some momentum towards the end of the first quarter,” said Samuel Tombs, an economist at Capital Economics Ltd. in London. Still, “we doubt that this strong growth will be maintained. With the euro zone still deep in recession, any recovery in the export-dependent industrial sector this year is likely to be limp at best.”
The pound advanced against the dollar and the euro. It rose 0.2 percent to $1.5559 as of 10:31 a.m. London time and was 0.3 percent stronger at 84.43 pence against the euro. The yield on the 10-year U.K. government bond was little changed at 1.77 percent.
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“China’s consumer inflation stayed subdued in April while the decline in factory-gate price declines deepened, adding to evidence of softer demand and giving the government room to raise utility fees.
The consumer price index (SHCOMP) rose 2.4 percent in April, the National Bureau of Statistics said today in Beijing, compared with a median forecast of 2.3 percent in a Bloomberg News survey. The producer price index fell 2.6 percent, after March’s 1.9 percent drop.
Inflation running below the government’s annual goal of 3.5 percent gives new Premier Li Keqiang leeway to loosen resource-fee controls that the World Bank says encourage pollution and limit incentives for new technologies. The producer-price deflation may reflect lower commodity prices and factory overcapacity…..”
Comments »“The euro strengthened against the dollar and yen after German factory orders unexpectedly increased in March, suggesting the region’s largest economy is starting to grow again.
The 17-nation currency rose against all except one of its 16 major peers as the German data damped speculation the European Central Bank will ease monetary policy further after President Mario Draghi said last week the ECB had an open mind about a negative deposit rate.Australia’s dollar fell to a two- month low against the greenback after the central bank cut interest rates to a record low. Sweden’s krona strengthened as industrial production (SWIPNSYY) exceeded economists’ forecasts.
“The German data was far better than expected,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London. “Today’s data suggests that we are another step away from them cutting the discount rate to negative territory.”
The euro gained 0.4 percent to $1.3123 as of 7:29 a.m. New York time after climbing to $1.3243 on May 1, the highest since Feb. 25. The single currency advanced 0.3 percent to 130.21 yen after dropping as much as 0.5 percent. The yen was little changed at 99.22 per dollar.
The euro is likely to trade between $1.30 and $1.32 until “data gives us strong direction one way or another,” Rabobank’s Foley said.
German factory orders, adjusted for seasonal swings and inflation, increased 2.2 percent from February, the Economy Ministry in Berlin said. The median estimate in a Bloomberg News survey of economists was for a 0.5 percent decline.
“Russian inflation accelerated in April after slowing a month earlier, strengthening arguments to delay easing monetary policy.
Consumer prices rose 7.2 percent from a year earlier after a 7 percent advance in March, the Federal Statistics Service in Moscow said by e-mail today. That matches the median estimate of 24 economists in a Bloomberg survey. Prices increased 0.5 percent in the month, also in line with economist forecasts.
Policy makers led by outgoing central bank Chairman Sergey Ignatiev are waiting to see a sustained slowdown in inflation before cutting their main interest rates. Restraining inflation remains a priority and the government won’t compromise efforts to subdue price growth with economic stimulus, First Deputy Prime Minister Igor Shuvalov said April 18 in Moscow. The economy grew 2.1 percent in the last three months of 2012 from a year earlier, the slowest rate since a 2009 contraction….”
Comments »“Italy’s economy will shrink this year more than the European Commission estimates as weak domestic demand and investment extend the country’s longest recession in more than two decades, the national statistics institute said.
Gross domestic product will decline 1.4 percent in 2013 before rising 0.7 percent next year, Rome-based Istat said in the institute’s annual report. Household consumption and corporate investments will both decline this year.
Istat’s GDP projections compare with forecasts by the European Commission for a 1.3 percent contraction this year and growth of 0.7 percent in 2014. The Organization for Economic Cooperation and Development said May 2 that the euro region’s third-biggest economy will shrink 1.5 percent this year and expand 0.5 percent next.
“In 2013 households will keep experiencing a further fall in available income with inevitably negative consequences on consumer spending,” today’s report said. “At the same time, a recovery in investment by companies appears unlikely because of the productive capacity utilization and of the persisting weakness of domestic demand.” …”
Comments »“Euro-area services and manufacturing output shrank for a 15th straight month in April and retail sales fell in March as the 17-nation economy struggled to emerge from recession.
A composite index based on a survey of purchasing managers in the manufacturing and services industries increased to 46.9 last month from 46.5 in March, London-based Markit Economics said in a report today. While above an initial estimate of 46.5 published on April 23, it was still below 50, indicating contraction. Retail sales declined for a second month in March, another report showed.
The euro-area economy will shrink more than previously estimated in 2013 as part of a two-year slump that has pushed unemployment to a record high, the European Commission said on May 3. The European Central Bank last week reduced its key interest rate to an all-time low after confidence was shaken by political turmoil in Italy and a bailout of Cyprus.
“The financial markets appear to have survived the government debt crisis, but the leading economic indicators have recently declined,” said Joerg Kraemer, chief economist at Commerzbank AG in Frankfurt. There is “a significant risk that, contrary to analysts’ expectations, the economy will not pick up in the spring,” he said.
Factory orders: Prior 3%, Market Expects -2.5%, Actual -4%
ISM: Prior 54.4, Market expects 54, Actual 53.1
“April rail trends finished with a whimper as intermodal rail traffic came in at 1.6% on a year over year basis. This continues a series of weakening data points as the Q2 period begins. After a very healthy 3 month average reading of 5.3% in Q1, the second quarter is off to a very sluggish start with a 0.38% average reading. The most recent reading brings the 12 week trailing average to 3.54% which is the weakest reading since January.
Here’s more from AAR…”
Comments »“WASHINGTON (AP) — The U.S. trade deficit narrowed for a second month in March as the daily flow of imported crude oil dropped to the lowest level in 17 years. The deficit with China hit a three-year low.
The Commerce Department says the trade deficit decreased to $38.8 billion, an 11 percent drop from February’s $43.6 billion….”
Comments »“Euro-area manufacturing output contracted for a 21st straight month in April, adding to pressure on the European Central Bank to cut interest rates to spur lending and growth.
A gauge of manufacturing in the 17-nation euro area declined to 46.7 last month from 46.8 in March, London-based Markit Economics said today. That’s above an initial estimate of 46.5 on April 23. A reading below 50 indicates contraction.
With the euro-area economy mired in a recession, the ECB’s Governing Council will cut its benchmark rate today to a record low 0.5 percent from 0.75 percent, according to the median of 70 economists’ estimates in a Bloomberg News survey. The Frankfurt- based central bank sees the economy shrinking 0.5 percent in 2013.
“There is nothing here to suggest that manufacturing will turn the corner and stabilize any time soon, putting greater onus on policy makers to act quickly to reinvigorate growth,” Chris Williamson, chief economist at Markit, said in today’s report.
The euro pared losses against the dollar after the data were released, trading at $1.3172 at 10:41 a.m. in Brussels, down less than 0.1 percent on the day.
“HEADS UP: The world’s biggest economies are releasing their April manufacturing PMI reports. And this is our scorecard.
So far, the reports reflect a global deceleration.
China’s official manufacturing PMI report slipped to 50.6 from 50.9 in March. China’s unofficial HSBC PMI fell to 50.4 from 51.6.
In the U.S., the ISM and PMI manufacturing reports each fell.
However, the Chinese and U.S. numbers all remain above 50.0, which indicates expansion.
In Europe, Spain, Italy, France and Greece all posted modest increases in their PMIs. However, they are all in contractionary territory.
The big story out of Europe is certainly Germany, whose PMI tumbled sharply into contractionary territory.
PMI…”
Comments »“Markit’s April U.S. manufacturing PMI survey results are out.
The headline index came in at 52.1, slightly above the flash estimate of 52.0 published earlier this month, but down from March’s 54.6 reading.
Any reading above 50 on the index signals expansion, so the 52.1 reading in today’s release suggests that American manufacturing is still expanding, but at a markedly slower pace than in March.
The new orders sub-component of the index fell to 51.5 from March’s 55.4 reading. The output sub-component fell to 53.7 from 56.6, and the employment sub-component fell to 53.2 from 54.6.
Below is a complete breakdown of the sub-components from the release…”
Comments »“The first major economic report with complete April data is out and it’s a miss.
South Korean exports climbed by just 0.4% year-over-year. Economists were looking for a gain of 2.0%.
Economists across Wall Street dub South Korean exports as the global economic canary in the coal mine.
Korean trade data usually comes before the first trading session of the month in Asia, which makes it the first of the world’s major economic indicators to be released.
Because Korea’s exports are heavily exposed to China and Japan — the world’s second and third largest economies — it is considered to have strong predictive power….”
Comments »“China’s National Bureau of Statistics just published its April manufacturing PMI report.
The headline number fell to 50.6 from 50.9 in March.
Economists were looking for a reading of 50.7.
Any reading above 50 signals expansion.
Here’s a break down of the March and April reports…”
Comments »“Euro-area inflation at a three-year low and record unemployment increased pressure on theEuropean Central Bank to cut interest rates later this week to spur lending and growth.
The annual inflation rate dipped to 1.2 percent in April, thelowest since February 2010, from 1.7 percent a month earlier, the European Union’s statistics office in Luxembourg said today. The rate has been below the ECB’s 2 percent ceiling since February. The March jobless rate advanced to 12.1 percent, the highest since the data series began in 1995.
The ECB’s Governing Council will cut its benchmark rate to a record low 0.50 percent on May 2 from 0.75 percent, according to the median of 70 economists’ estimates in a Bloomberg News survey. The Frankfurt-based central bank sees inflation at 1.6 percent this year and 1.3 percent in 2014.
“If it weren’t for the ECB’s usual reluctance to make large changes, there would be a strong case to cut by 50 basis points, and I think the likelihood is perhaps higher than the market expects,” Frederik Ducrozet, an economist at Credit Agricole SA (ACA), said by telephone from Paris. “It’s probably around 20 percent, because with inflation that low it’s really the best time to do such things and maximize the impact on the market.”
“Taiwan’s economy expanded at a slower pace than economists estimated in the first quarter as a faltering global recovery hurt exports, increasing pressure on the central bank to extend an interest-rate pause to aid growth.
Gross domestic product rose 1.54 percent in the three months through March from a year earlier, after increasing 3.72 percent in the fourth quarter, the statistics bureau said in a preliminary report in Taipei today. The gain was less than all estimates in a Bloomberg Newssurvey of 17 economists, where the median was 3.1 percent.
The island’s growth slowdown adds to signs of a cooling global economy after China and the U.S. expanded less than analysts estimated last quarter. Taiwan’s export orders and industrial output for March unexpectedly fell, while Japanese and South Korean production missed forecasts as faltering demand limitsAsia’s recovery.
“Taiwan’s GDP is a reflection of a sluggish global recovery and the decline of global demand, notably from China (CNGDPYOY),” said Raymond Yeung, a Hong Kong-based senior economist at Australia & New Zealand Banking Group Ltd. The data suggests the monetary policy stance will be maintained, “unless there is a significant contraction of the regional economies from unforeseeable risks, including avian flu.”
The benchmark Taiex stock index gained 0.8 percent at 9:53 a.m. in Taipei. The Taiwan dollar climbed 0.3 percent to NT$29.464 against its U.S. counterpart, according to Taipei Forex Inc. It has declined about 1 percent this year.
“We’re getting deeper and deeper into the experiment now known as “Abenomics” in Japan. Ultimately, the plan is designed to defeat the decades of deflationary pressures in the Japanese economy. They’ve announced a massive fiscal plan, an official 2% inflation “target” a doubling of the BOJ’s balance sheet and as a result the Yen has declined 30% in a matter of months and the Japanese stock market has surged over 60%. By the looks of the market reaction you’d think that something had not just changed, but that we’d be looking at a new economy entirely.
But the latest CPI report shows that the deflation is actually WORSENING. The Statistics Bureau in Japan reported that Japan’s National Core CPI fell to -0.5% in march, down from -0.3%. This was worse than expectations of -0.4%. The headline rate fell to -0.9% versus expectations of -0.8%.
The latest reading is the worst reading since 2010. In fact, it’s the worst reading this year and down almost 1% from when the aggressive Japanese easing was first announced. In other words, if Abenomics is inflating prices it certainly isn’t working in the real economy and appears to only be “working” where gamblers are placing bets that it will eventually show itself….”
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