The main US economic data released
this week related to inflation, as the March PPI number came in at 1.1%
versus February’s 0.6%, whilst the CPI was as expected at 0.2% for the
month and 4% annualised. Housing starts ands building permits eased,
whilst March advance retail sales data was slightly better than analysts
expected at 0.2%. Mega-Bank, Citigroup, announced higher profits for
Q108 (but also higher losses). It was a similar story for Merrill Lynch
who, like Citi, announced further job cuts. The Dow and the S&P 500
gained 4.3%, whilst the Nasdaq managed a rise of 4.9%.
The Euro-Zone budget deficit, at year end 2007, represented 66.3% of
GDP, whilst in the UK the March 2008 deficit rose to £10.2BN, a third
more than expected and the largest shortfall since records began in
1993.UK mortgage lending fell by 17% in March, according to the Council
of Mortgage Lenders, whilst the EU April Zew survey of economic
sentiment fell by more than expected despite a slight pick up in retail
sales. The FTSE 100 index gained 2.7%, whilst the French CAC and the
German DAX rose by 3.4% and 3.6% respectively.
Out East, New Zealand’s inflation rate accelerated in March, annualising
at 3.4% whilst in India it is at a 3 year high, at 7.4%. Meanwhile in
China the Central Bank Chief said that, despite six interest rate
increases over the past year, there is room for more hikes to tame a 10
year high in inflation. The Nikkei rose by 1.2% with the Hang Seng lower
by 1.9%.
On the currency front, the $US index inched higher by 0.3% to 72.01,
with the stronger currencies this week being the Canadian Dollar and the
£Sterling, whilst Yen declined by 2.5% and the Swiss Franc by 1.9%.
German 10 year bond yields surged by 22bps to 4.13% whilst Japanese JGB
yields rose by 2bps to 1.4%. The US 5 year Treasury yield jumped by a
massive 14.5%% to 2.95%, whilst the 10 year yield gained 7%, ending the
week at 3.74%.
Within the Commodities Complex the crude oil price gained 5.5% ending
the week at $116 a barrel, whilst the price of Gold fell by 1.27% to
$915oz.
Next week sees March home sales and durable goods orders for the US and
advance consumer confidence numbers for April. UK house price data is
released, together with Q108 advance GDP estimates and March retail
sales, whilst in Japan the March trade balance and the Tokyo CPI figures
are released.
U.S. foreclosure filings jumped 57% and bank repossessions more than
doubled in March from a year earlier as adjustable mortgages increased
and more owners gave up their homes to lenders. More than 234,000
properties were in some stage of foreclosure, or one in every 538 U.S.
household, according to RealtyTrac.com. It said that Nevada, California
and Florida had the highest foreclosure rates. About $460 billion of
adjustable-rate loans are scheduled to reset this year and auction
notices rose 32% from a year ago, a sign that more defaulting homeowners
are ‘simply walking away and deeding their properties back to the
foreclosing lender.
“Debts are like children begot with pleasure,
but brought forth in pain”
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