US, economic data released this week
included a fair bit on housing, including the December S&P/Case Shiller
home price index, which rose by 0.3%, the 7th consecutive monthly rise.
Not so good were January home sales, where existing ones fell by 7.2%
and new home sales were lower by 11.2%. January durable goods orders
looked good at 3% versus the forecast 1.5%, but if you strip out the
effects of private aircraft sales, the figures aren’t so good. Finally
the Q409 GDP number was revised higher to 5.9% from the original 5.7%
reported, mainly due to inventory building. The Dow fell by 0.7% whilst
the S&P 500 and the NASDAQ gave up 0.4% and ¼% respectively.
Euro-Zone CPI for January fell by 0.8%, in line with expectations,
whilst German business confidence unexpectedly fell in February, the
first fall in 11 months. Meanwhile, UK Q409 GDP was reported at 0.3%
versus the 0.2% consensus expectations and the 0.1% prior calculation
and nationwide house prices for February fell by 1%. The FTSE 100 index
was effectively even for the week, whilst the French CAC and the German
DAX ended lower by 1.6% and 2.2% respectively.
Out East, Japanese CPI for February fell by 1.8% year on year whilst
large retailer sales for January fell by 5.6%. Elsewhere, Hong Kong
raised taxes on luxury homes, for the first time in a decade, in an
effort to cool the speculation of late. The Nikkei remained level whilst
the Hang Seng jumped by 3.6%.
The $US index slipped by 0.3% to 80.4, with other losers including the
British Pound, lower by 1.5% and the $Canadian, which fell by 1.2%.
Gainers included the Yen, which jumped by 2.9% . German bund yields fell
by 18bps this week at 3.1% and UK 10-year yields sank by 24bps to 4.03%,
whilst Japanese JGB yields declined by 3.5bps, ending the week at
1.295%. US Treasury 5 and 10 year yields slumped by 7.3% and 4.9%,
ending the week at 2.28% and 3.6% respectively.
Within the commodities complex the $crude oil price eased by 0.5% to
$79.7 a barrel, whilst the price of $Gold also eased by 0.2%, closing
the week at $1118oz, in what was an up/down week.
Next week sees the latest “official” unemployment data for the US, the
Euro-Zone and Japan and February vehicle sales for the latter. The US
also release pending home sales for January and personal incomes and
spending for the same month and the important consumer credit numbers
for January. UK consumer credit figures for March will be released,
together with February consumer confidence numbers. Finally, interest
rate decisions will be announced by the Bank of England MPC and by the
ECB. .
Credit default swaps are derivatives based on bonds and loans that are
used to speculate on or hedge a company’s or country’s ability to repay
debt. Most of the problems leading up to the gut wrenching collapse for
stocks in 2007/08 related to company CDS’s., whereas spreads are now
widening on the sovereign debt of the minor European nations, not
forgetting of course, Dubai. This now appears to be spilling over to
those of the UK, Germany, Japan and to the big daddy of them all, the
US, despite the reassuring comments, echoed by Wall St, that “European
Contagion wont hit the US.”
Due to holiday commitments there will be no week ending next week.
“What
greater reassurance can the weak have than to be
told that they are like anyone else?”
