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China Inflation Rebounds Beyond Expectations

Inflation in China increased more than expected in March after easing to a twenty-month low in February, data from the National Bureau of Statistics showed Monday. The latest rise in inflation rate was mainly driven by rising food costs.
Inflation rose to 3.6 percent in March from 3.2 percent in February. Economists had forecast an increase to 3.4 percent. Food inflation accelerated to 7.5 percent from 6.2 percent in the previous month, partly led by a 6.1 percent annual surge in costs of fresh vegetables.
Last month, Premier Wen Jiabao set an inflation target of 4 percent for 2012, the same as that of 2011. Inflation exceeded the target every month last year due to higher food prices.
The government hiked fuel prices for the second time in less than six weeks in March amid mounting pressure from the country's refineries to respond to the rising international crude prices. This might have added to inflationary pressures with China being the second-largest oil consumer after the U.S.
The price index for transportation and communications rose to 0.3 percent, recovering from February's 0.4 percent fall. Utility costs advanced 2.6 percent year-on-year in March.
The statistical office also noted that the house prices increased 2 percent from the previous year. Wen had pledged to continue property market curbs to rein in prices, which, according to him, are still far from "reasonable levels."
In February, the People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points for the second time in three months to boost growth, but refrained from an interest rate reduction fearing inflation surge from possible spike in global fuel prices.
Separately, the statistical office said that the producer price index fell 0.3 percent from March 2011. The outcome was in line with expectations and followed a flat reading in February. Prices have been falling steadily since July last year.
The government targets 7.5 percent growth for the economy this year, lower than the previous target of 8 percent. The economic growth slowed to 9.2 percent in 2011 from 10.4 percent in 2010.


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U.S. Dollar Weakens On Bernanke Comments

The U.S. dollar declined against most major currencies in early Asian deals on Tuesday after Federal Reserve Chairman Ben Bernanke said that the economy is "far from recovering from credit crisis."
In a speech at the Federal Reserve Bank of Atlanta Financial Markets Conference, in Stone Mountain, Bernanke suggested that US economy is yet to fully recover from the impact of the global financial crisis.
The greenback that closed yesterday's deals at 1.5894 against the pound and 0.9174 against the franc slipped to a new 1-week low of 1.5933 and a 5-day low of 0.9149, respectively. If the U.S. currency falls further, it may target 1.60 against the pound and 0.91 against the franc.
House prices in the United Kingdom improved in March, according to survey results released by the Royal Institution of Chartered Surveyors (RICS).
The RICS Home Price Balance for March was minus-10, compared to minus-13 in February
Against the New Zealand and Australian dollars the greenback reached fresh 1-weeks lows of 0.8242 and 1.0359 from Monday's close of 0.8218 and 1.0316, respectively. The next downside target level for the greenback is seen at 0.83 against the kiwi and 1.04 versus the aussie.
Activity in Australia's construction sector picked up slightly in March but remained in sharp contraction, according to survey results published today by the Australian Industry Group.
AIG's Performance of Construction index for March was 36.2, an increase of 0.6 points from February.
Also, Australia's business conditions improved modestly in March, along with a jump in confidence, a survey by the National Australia Bank (NAB) showed.
The business conditions index rose to 4 in March from 3 in February. The business confidence index advanced to 3 from 1 in the previous month
The U.S. currency dropped to a 5-day low of 1.3145 against the euro with 1.32 seen as the next downside target level. The pair closed Monday's deals at 1.3107.
Looking ahead, Swiss unemployment rate for March, German trade data, French industrial production and U.K. DCLG house prices for February are due in the European session.
At 10:00 am ET, U.S. wholesale inventories data for February is slated for release.


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European Economics Preview: U.K. Producer Price Data Due

Producer prices from the U.K. and final inflation from Germany are the major statistical reports due on Friday, headlining a light day for the European economic news.
The Federal Statistical Office is set to release final Germany inflation data at 2.00 am ET. According to preliminary data, the harmonized index of consumer prices increased 2.3 percent on an annual basis in March, slower than the 2.5 percent growth seen in February.
In the meantime, Statistics Finland is scheduled to publish consumer price figures for March. In February, annual inflation slowed to 3.1 percent from 3.2 percent in January.
At 3.00 am ET, final inflation figures from Spain and industrial production from Hungary are due. Flash estimate published on March 29 showed that EU harmonized inflation in Spain fell to 1.8 percent in March from 1.9 percent.
Half an hour later, Dutch trade figures for February are due.
At 4.00 am ET, Italy's statistical office is slated to release industrial production for February. Economists forecast production to drop 0.5 percent month-on-month after easing 2.5 percent in January.
At 4.30 am ET, U.K. producer price data is due from the Office for National Statistics. Input price inflation is seen easing to 4.8 percent in March from 7.3 percent in February. At the same time, output price inflation is seen at 3.5 percent, down from 4.1 percent in the previous month.
Italy's final inflation figures are due from the statistical office Istat at 5.00 am ET. According to preliminary estimate, inflation, measured by the harmonized index of consumer prices, rose to 3.8 percent in March from 3.4 percent in February.


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Bank Of Korea Cuts 2012 GDP Growth Forecast

South Korea's central bank on Monday lowered its forecast for economic growth this year due to weaker-than-expected world economic growth and higher oil import prices.
Bank of Korea said it expects the gross domestic product to rise 3.5 percent this year, weaker than the 3.7 percent growth forecast in December. For 2013, growth is projected at 4.2 percent.
Export growth is forecast to slow somewhat, owing to the cooling of world trade growth amid recession in the euro area, the bank said. Export growth is expected to ease to 4.8 percent this year from 10.5 percent last year. The latest estimate is also slightly weaker than the December forecast of 5 percent.
On the other hand, private consumption is expected to accelerate to 2.8 percent from 2.3 percent in 2010. This was, nonetheless, lower than the December forecast of 3.2 percent due mainly to deteriorating terms of trade and sluggish fourth quarter performance last year.
The rate of increase in the headline consumer price index is forecast to stand at 3.2 percent in 2012, lower than the previous forecast of 3.3 percent. For 2013, headline CPI is forecast to rise 3.1 percent.
The CPI excluding agricultural and petroleum products is projected to rise 2.6 percent in 2012, slower than earlier forecast of 3.3 percent. The index excluding food and energy is expected to rise 2.2 percent, also down from 2.7 percent forecast earlier.
The unemployment rate is projected at around 3.3 percent for 2012 and 2013, lower than last year's 3.4 percent.


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European Economics Preview: German ZEW Survey, UK Inflation Data Due

Economic sentiment from Germany and consumer price inflation from the U.K. are the major reports due on Tuesday.
At 2.00 am ET, European Automobile Manufacturers' Association, or ACEA is slated to release new car registrations for March. Registrations were down 9.7 percent year-on-year in February.
At 4.30 am ET, the Office for National Statistics is slated to release U.K. inflation data for March. Annual inflation is expected to remain steady at 3.4 percent. At the same time, retail price inflation is seen easing to 3.6 percent from 3.7 percent in February.
Spain's government aims to raise between EUR 2 billion and EUR 3 billion from the auction of short-term bills. Spain plans to issue 12 and 18 months Treasury bills.
Germany's ZEW economic sentiment survey results are due at 5.00 am ET. Economists forecast sentiment to drop to 19 in April from 22.3 in March.
In the meantime, Eurostat is set to release final HICP figures for March. According to flash estimate, Eurozone annual inflation fell to 2.6 percent in March from 2.7 percent in February.
Italy's current account data for February is also due at 5.00 am ET. The current account deficit totaled EUR 7.95 billion in January.


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Eurozone Current Account Swings To Deficit In February

The Eurozone current account unexpectedly logged a seasonally adjusted deficit of EUR 1.3 billion in February, the European Central Bank said Wednesday. Economists were expecting the surplus to fall to EUR 2 billion from EUR 3.7 billion surplus seen in January.
The surplus in goods account fell to EUR 1.5 billion in February from EUR 3.3 billion last month. Likewise, the balance in income declined sharply to EUR 1.2 billion from EUR 4.2 billion. Meanwhile, the surplus in services rose to EUR 4.7 billion from EUR 4.1 billion.
The deficit in current transfers totaled EUR 8.7 billion compared to a shortfall of EUR 7.9 billion a month ago.
The 12-month cumulated seasonally adjusted current account registered a surplus of EUR 2.1 billion in February, which was less than 0.1 percent of euro area GDP, compared with a deficit of EUR 18.1 billion a year earlier.


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European Economics Preview: Spanish Debt Auction In Focus

Spanish debt auction is set to dominate the European economic news on Thursday amid widespread concerns that the country may be forced to seek an international bailout after its borrowing costs surged close to levels widely seen as unsustainable at an auction on April 11.
At 3 am ET, the Hungarian Central Statistics office is expected to release the data on average gross wages for the month of February. Economists expects an annual increase of 6 percent.
Unemployment data from the Netherlands is due at 3.30 am ET. At 4 am ET, Italian statistical office is expected to publish industrial orders' statistics for February. Orders are forecast to decline 6.2 percent year-on-year and 1.1 percent month-on-month amid waning demand from Europe.
At 4.30 am ET, Spain is set to auction around EUR 2.5 billion in two and 10-year bonds. The yield on benchmark 10-year bond rose to above 6 percent on April 11, but fell back on Tuesday.
France is scheduled to auction securities including 2017 notes and 2018 inflation-linked debt for a maximum target of EUR 11 billion at around 4.50 am ET and 5.50 am ET. Markets are also keen on France as it comes just days ahead of the first round of Presidential elections on Sunday.
Industrial production and producer price index from Poland is expected at 8 am ET. Production is forecast to rise 4.4 percent annually in March, while producer price inflation is seen moderating to 4.8 percent.
Flash consumer sentiment from Eurozone is slated for release at 10 am ET. The confidence index is expected to stay almost steady at -19. Consumer confidence index rose to -19.1 in March from -20.3 in the previous month.


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European Economics Preview: German Ifo Business Confidence Forecast To Fall

Business confidence from Germany and retail sales from the U.K. are the major reports due on Friday.
At 2.00 am ET, the Federal Statistical Office is set to release German producer prices for March. Producer price inflation is seen easing to 3.1 percent in March from 3.2 percent in February. On a monthly basis, producer price inflation is seen at 0.4 percent.
Dutch consumer spending and consumer confidence are due from Statistics Netherlands at 3.30 am ET.
The Munich-based Ifo institute is slated to publish German business confidence survey results at 4.00 am ET. The business sentiment index is seen easing to 109.5 in April from 109.8 a month ago. The current assessment index is expected to fall to 117.
Half an hour later, U.K. retail sales figures are due. Economists forecast retail sales to rise 0.4 percent month-on-month in March after easing 0.8 percent in February.
Poland's net consumer price inflation data is due at 8.00 am ET. Annual inflation is seen falling to 2.5 percent in March from 2.6 percent in February.


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European Economics Preview: Eurozone PMI Data Due

Flash results of Purchasing Managers' survey from major Eurozone economies are due on Monday.
At 2.45 am ET, the French statistical office Insee is scheduled to publish April business confidence survey results. The index is expected to remain unchanged at 96.
Markit Economics is set to publish Purchasing Managers' survey data at 3.00 am ET. The French manufacturing PMI is seen rising to 47.2 in April from 46.7 a month ago. Likewise, the services PMI is forecast to rise to 50.2 from 50.1 in March.
Half an hour later, German flash PMI figures are due. The manufacturing PMI is expected to rise to 48.9 from 48.4 and the services PMI to improve to 52.4 from 52.1.
At 4.00 am ET, Markit is expected to issue Eurozone flash PMI. The composite PMI is seen rising to 49.3 in April from 49.1 a month ago. In the meantime, Italy's consumer confidence for April is due.
Eurostat is slated to release Eurozone government debt-GDP data for 2011 at 5.00 am ET.


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China Leading Index Suggests Continued Slowing Of Economy

The Conference Board's leading indicator of China's economic activity went on to support continued slowing of the economy, with significant downside risks remaining.
The Conference Board on Tuesday said that its leading economic index increased 0.8 percent in March to 230.6, slower than 1 percent increase in February and a 2.1 percent increase in January.
"While the China LEI in March continued to increase and its six-month growth rate remained steady, this month's reading supports a continued slowing of the economy," Conference Board's resident economist Andrew Polk said.
According to the economist, the volatility among leading indicators points to significant downside risks. Meanwhile, the diffusion index, which measures the balance among the rising and falling index components, also showed that risks are tilted towards the downside, highlighting the increasing fragility of China's economy, Polk said. The coincident economic index, which measures current economic activity, increased 0.6 percent in March to 219.1, following a 4 percent increase in February and a 3 percent decrease in January.
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