US consumer confidence fell to a 16
year low in February, yet January retail sales came in stronger than
expected. The December trade deficit improved to $58.8BM from the prior
month’s $63.1BN. The Dow and the S&P 500 gained 1.4% each, whilst the
and the Nasdaq rose by 0.7%.
Q407 GDP for the Euro-Zone was at 0.4%, annualising at 2.3%, albeit that
December’s trade balance deteriated. Meanwhile, the February ZEW Survey,
a measure of economic sentiment came in better than expected. Turning to
the UK, its December trade balance also deteriated, whilst jobless
claims in January fell by 10.8%.Inflation data was contradictory as
January PPI jumped to 5.7% from the prior 5%, somewhat higher than the
consensus expectation of 5.1%, whilst CPI fell by 0.7% in January,
bringing the year on year rate to 2.2%. The FTSE100 index remained level
over the week, whilst the French CAC and the German DAX were higher by
1.3% and 1% respectively.
Out East, Australia’s official unemployment rate fell to 4.1%, the
lowest level since 1974, whilst in New Zealand house sales have slumped
by 31%, from a year earlier, a seven year low. Japanese consumer
confidence fell by more than expected in January, despite the Q407 GDP
which came in at double expectations, at 0.9% or annualised at 3.7%. The
Hang Seng gained 2.9% over the week, whilst Japan’s Nikkei Dow 225
jumped higher by 4.6%.
On the currency front, the $US index declined by 0.7% this week to 76.1
whilst the Euro rose by 1.1%. German 10 year bond yields jumped 9bps,
ending the week at 3.95% whilst Japanese JGB yields rose by 3.5 bps to
1.45%. US 5 year Treasury yields were higher by 2.5% to 2.7%, whilst the
10 year yield added 3.5%, ending the week at 3.78%.
Within the Commodities Complex the crude oil price jumped by 4% to $95.5
a barrel, whilst the price of Gold eased 1.8%, ending the week at
$906oz.
Next week sees a holiday shortened week for the US, which includes
January CPI data and the latest housing starts. The UK, releases the
January PSBR, M4 money supply and retail sales numbers, whilst the
Euro-Zone announces February PMI manufacturing. Japan’s January trade
balance and department store sales are due for release..
According to the Bank of America the loss on Global stock Markets, since
their October 2007 peak, is 14.7% or $7.7Trillion. US insurers’, who
hold massive investments in stocks and corporate debt, both within and
outside of the US, have to report their financial position by the end of
February. Also, under strict new audit codes, Japanese banks have to
report by the end of March 2008.
“My word is my Bond isn’t quite what it used to
be.”
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