A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

April 14, 2014

"…Prices are going up by the elevator and salaries by the stairs…"

— Argentine union official Luis Barrionuevo, during the recent general transportation strike (Bloomberg, April 10, 2014)

The week in review...

Americas

Argentina: Narrowing options Argentina recently devalued its peso nearly 20% and slashed gas and water subsidies, measures intended to placate holders of its shaky sovereign debt by replenishing rapidly-dwindling foreign currency reserves (now down to $24.8 bn, half of what they were in 2010). One result: rampant consumer inflation – about 35% in Feb year-over-year. Strikes by transportation workers and police have fueled a rising crime rate as well as slowdowns in Rosario, the location of Argentina’s largest grain export hub.

US: By the numbers Growth was clearly visible in data released this week: job openings in Feb beat estimates, rising by 299k to 4.17 mn, the highest level since Jan 2008. Consumer credit in Feb rose at a 6.5% annual rate, reaching an estimated $16.5 bn, above expectations. Revolving credit, including credit cards, dropped at a 3.5% annual rate, while car and student loans rose at a 10% rate. First-time unemployment claims dropped by 32k to 300k for the week ended Apr 5, the lowest level since May 2007. And tax collections for Mar were $216 bn, up 16% from a year ago – some from rate increases, some from growing incomes of high-rate taxpayers.

Europe

Eurozone: What crisis? Greece's sale of more than €3 bn ($4.15 bn) of 5-year sovereign bonds was the first such offer in four years, and was greeted by over €20 bn of orders, at a yield of 4.95% — much better than expected. The rates were echoed in other markets: 10-year Italian bonds reached 3.15% and Spanish 10-years reached 3.16% – levels appearing to signal little question about the solvency of their governments. Outside the bourses, however, the atmosphere remains contentious, with Greece's labor unions declaring a nationwide anti-austerity strike, and the explosion of a car bomb outside one of the central bank’s offices in central Athens.

Asia

China: Balancing act Trade figures reflected the challenges of maintaining growth in a time of structural change. Chinese exports fell 6.6% in Mar at the same time as imports fell 11.3%, suggesting that both the domestic and export-manufacturing sectors are slowing. The government appears to expect growth to fall short of the often-promoted 7.5% rate; a government-controlled labor group reported that Premier Li Keqiang had said growth of "only 7.2%& would still meet the country's employment goals.

Signs of the times:

India’s forex reserves soar to $303.67 billion – The Hindu

Japan posts first current account surplus in five months – Channel NewsAsia

U.K. Industrial Output Surges More Than Forecast – Bloomberg

Brazil March inflation at highest for the month in 11 years – Reuters

Sources: Bloomberg, Reuters, Wall Street Journal, Financial Times, New York Times, Caijing, xinhuanet, EuroNewsNet, MNI, The Hindu, Channel NewsAsia.

...The week ahead:

GLOBAL ECONOMIC CALENDAR: April 13 – April 19

 

U.S.

Other Americas

Europe, UK, Africa, Mideast

Japan

Asia Ex Japan & Pac Rim

Sun
4/13

 

 

 

 

Singapore: GDP

Mon
4/14

Retail sales, business inventories

Colombia: industrial production

Eurozone: industrial production, capacity utilization
UK: retail sales

 

Australia: interest rate decision

Tues
4/15

Consumer prices, weekly retail sales, homebuilder optimism, foreign securities purchases (TIC data), NY Fed manufacturing survey

Canada: manufacturing sales
Brazil: retail sales
Peru: unemployment rate
Argentina: consumer prices
Venezuela: GDP

Germany: current conditions, economic sentiment
Switzerland: producer prices, expectations
Russia: industrial production
UK: retail prices, producer prices, consumer prices

 

China: GDP, fixed asset investment, industrial production, retail sales
India: wholesale prices, consumer prices
Singapore: retail sales
New Zealand: consumer prices

Wed
4/16

Housing starts, building permits, industrial production, capacity utilization, mortgage applications, Atlanta Fed business inflation expectations, Beige Book

Canada: foreign securities purchases
Brazil: economic activity survey

Eurozone: consumer prices
Italy: trade balance
Norway: trade balance
UK: average earnings, unemployment rate, claimant count change
South Africa: retail sales

Industrial production, capacity utilization

India: M3 money supply
South Africa: producer prices

Thu
4/17

Initial jobless claims, Philly Fed survey, Fed balance sheet, money supply

Canada: consumer prices
Brazil: unemployment rate
Chile: interest rate decision

Germany: producer prices
Russia: producer prices

Household confidence

China: house prices

Fri
4/18

 

 

Italy: industrial sales & new orders, wage inflation
Russia: retail sales, unemployment rate government finances

 

India: bank loan growth

Sat
4/19

 

 

 

 

 


Definitions:

Treasury International Capital (TIC) is a US Treasury Department measure of capital flows to and from the US.

Gross Domestic Product ("GDP") is an economic statistic which measures the market value of all final goods and services produced within a country in a given period of time.


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Previous Editions

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Poll

Go for growth: Where will a global recovery be strongest this year?








Poll

Go for growth: Where will a global recovery be strongest this year?

Europe, as countries emerge from bailouts
(40%)
US, as consumers regain optimism
(40%)
Japan, as stimulus programs begin to bear fruit
(9%)
China, as reform and pro-growth policies continue
(11%)



Previous month Poll

Expect the unexpected:
Which of these outcomes
do you think is the most likely
in the coming year?

US: economic surge spurs Fed to begin raising interest rates
(27%)
Japan: return to recession despite Abe's continued aggressive stimulus policies
(12%)
China: negotiate with neighbors over its territorial claims in the South China Sea
(5%)
Europe: Italy forms a government that lasts the entire year
(14%)
None of the above; business as usual worldwide
(42%)