US economic data released this week
included February home sales, where existing sales did better than
forecast , at -0.6%,whilst new home sales were worse than forecast at
-2.2%. February durable goods orders grew at 0.5%, below forecasts, as
was Q409 GDP, which was revised down to 5.6% from the initial 5.9%
number. The Dow rose by 1% whilst the S&P 500 and the NASDAQ were higher
by 0.6% and 0.9% respectively.
Euro-Zone industrial new orders for January contracted by 2% versus the
+1.8% expected, whilst M3 money supply for the zone in February fell by
0.4% annualised. UK CPI for February, at 0.4% and 3% year on year, was
below forecasts but retail sales for the same month surprised on the
upside at 1.6%. The FTSE 100 index rose by 0.9%, whilst the French CAC
and the German DAX ended higher by 1.6% and 2.3% respectively.
Out East, Japan’s exports climbed at the fastest pace in 30 years in
February, at 45.3% annualised. Elsewhere, Vietnamese inflation
accelerated to a one year high in March, at 9.46% year on year. The
Nikkei gained 1.6% whilst the Hang Seng fell by 1.5%.
The $US index was higher by 1.1% at 81.6, with other gainers including
the Mexican Peso, higher by 0.7%. Losers included the Euro and the
Japanese yen, falling by 0.9% and 2.1% respectively. Sovereign debt
yields jumped this week, as Fitch downgraded Portugal. German bund
yields rose by 4bps to 3.15% and UK 10-year yields jumped by 8bps to
4.03%, whilst Japanese JGB yields were higher by 1.5bps, ending the week
at 1.375%. For US Treasury yields, 5 years gained 6.25% to 2.6% whilst
the 10 year gained 4.6%, ending the week at 4.56%.
Within the commodities complex the $crude oil price fell by 1.2% to $80
a barrel, whilst the price of $Gold remained level on the week, closing
it at $1107oz.
Next week sees the latest on home prices for the US and for the UK, with
the former also releasing February personal income and expenditures plus
March employment data, whilst the UK provide February consumer credit
statistics and Q409 GDP updates. Euro-Zone consumer confidence figures
for March are due for release, as are February unemployment for the
region, whilst for Japan we get to see the latest retail sales and
unemployment numbers.
The Euro54BN “Greek Tragedy” continues, as the 16 Euro-Zone leaders
agreed to a rescue plan,” If Greece finds itself unable to borrow.” The
deal would provide two thirds of any requirement by individual loans
from other euro zone countries (read European Taxpayers) with the
balance by funding from the International Monetary Fund (International
Taxpayers.) The real concern of the leaders, of course, is the very
fabric of the Euro itself, which has come under increased pressure as
the “herd” come to realize the folly of a “one cap to fit all currency.”
In a defiant tone, EU Commission President, Jose Manuel Barroso, on
summarizing the deal said,” I hope that financial markets will now act
on fact and not on fiction.” We will see.
“The ultimate result of shielding men from the
effects of folly is to fill the world with
fools"
