Week ending 13th April 2007   

US economic data released this week included the February trade deficit, which narrowed by 0.7% to $58.4bn and the March PPI, which rose by a larger than expected 1%..Q107 earnings for General Electric came in higher than expected, up by 6%, whereas Apple disappointed the street by announcing the delay of its latest upgrade of the Macintosh operating system. The Dow was higher by 0.4%, underperforming the S&P 500 gain of 0.6% .Meanwhile the Nasdaq added 0.8%
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The ECB left interest rates on hold, at 3.75%, with board members’ reiterating an intent to raise them if inflation threatened. The region’s Q406 GDP came in as expected at 0.9%, annualising at 3.3%, whilst industrial production for February edged higher to 4.1%.March retail sales for the UK increased by 6% year on year as the countries trade deficit for February deteriorated to £4.3bn.The UK’s FTSE 100 gained 1.6%, whilst the French CAC 40 rose by 0.9% and the German Dax jumped by 2%.

Out East, the Bank of Japan left interest rates on hold at 0.5%, whilst China’s money supply surged by 17.3% in March, far above the Central Bank’s target. Staying with China, vehicle sales totalled 847,200 last month, a monthly record. Over the week the Nikkei fell by 1%, and the Hang Seng gained 0.7%,

The $US index eased by a further 0.7% to 82.1, whilst US Treasury yields rose over the week.. The 5 and 10 year yields rose by 2.6% and 1.9% respectively, ending the week at 4.7% and 4.76%.

Within the commodities complex, the $crude oil price rose by 3.2% to $66.3 a barrel, whilst the $Gold price gained 1.6%, ending the week at $689oz.

Next week is a busy one for Q106 earnings and for the latest data on retail sales, CPI and industrial production. The UK, and the Euro-zone’s latest CPI figures are released, as is March unemployment numbers for the UK. We also get to see March consumer confidence for Japan.

Returning to the G7 Finance Ministers’ meeting (and their Central Bank Governors’) ,ahead of spring meetings with the IMF and the World Bank, their released statement was upbeat in respect on the global economy with particular praise for Hedge Funds’ and the growth of derivatives, citing their contribution to the “significant efficiency” of the financial system. They may yet have to eat their words on this?

“Do nothing and be brave about it”

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