From the USA we received mixed data on Tuesday; firstly the CB consumer confidence index fell slightly in April, with a reading of 82.3 the index fell from 83.9 in March. House prices in many USA states have continued to rise albeit at a slower pace. This news flies in the face of recent sales data over the past week which suggests that home sales are lagging as higher mortgage payments and increasing prices have priced many potential buyers out of the market.
Looking at equity markets USA indices rose in late trading whilst the majority of the main European bourses enjoyed significant rises on Tuesday with the German DAX index, perhaps the index with the biggest exposure to matters in Russia and the Ukraine, rising by 1.46% on the day.
The Conference Board Consumer Confidence Index Falls Slightly in April
The Conference Board Consumer Confidence Index®, which had increased in March, declined slightly in April. The Index now stands at 82.3 (1985=100), down from 83.9 in March. The Present Situation Index decreased to 78.3 from 82.5, while the Expectations Index was virtually unchanged at 84.9 versus 84.8 in March. The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was April 17th.
Home Prices Defy Weak Sales Numbers According to S&P/Case-Shiller
Data through February 2014, released today by S&P Dow Jones Indices for its S&P/Case-Shiller 1 Home Price Indices, the leading measure of U.S. home prices, show that the annual rates of gain slowed for the 10-City and 20-City Composites. The Composites posted 13.1% and 12.9% in the twelve months ending February 2014. Thirteen cities saw lower annual rates in February. Las Vegas, the leader, posted 23.1% year-over-year versus 24.9% in January. The only city in the Sun Belt that saw improvement in its year-over-year return was San Diego with an increase of 19.9%. Both Composites remained relatively unchanged month-over-month.
German Consumer prices in April 2014: expected rise of +1.3% on April 2013
Consumer prices in Germany are expected to rise by 1.3% in April 2014 compared with April 2013. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that the consumer prices are expected to decline by 0.2% on March 2014. Year-on-year change in the consumer price index regarding selected product groups, in percent the harmonised consumer price index for Germany, which is calculated for European purposes, is expected to increase by 1.1% in April 2014 on April 2013. Compared with March 2014, it is expected to be down 0.3%. The final results for April 2014 will be released on 14 May 2014.
Market overview at 10:00 PM UK time
The DJIA closed up 0.53%, SPX up 0.48% and the NASDAQ up 0.72%. Euro STOXX closed up 1.35%, CAC up 0.83%, DAX up 1.46% and the UK FTSE up 1.04%. The DJIA equity index future is up 0.40%, the SPX future is up 0.25% and the NASDAQ future up 0.49%. NYMEX WTI oil closed the day up 0.22% at $100.86 per barrel with NYMEX nat gas up 0.71% at $4.83 per therm.
Forex focus
The yen declined 0.8 percent versus the South African rand, 0.7 percent against Russia’s ruble and 0.5 percent against the won late afternoon New York time. Japan’s currency fell 0.1 percent to 102.57 per dollar after dropping 0.3 percent yesterday. It rose 0.2 percent to 141.66 per euro. Europe’s shared currency declined 0.3 percent to $1.3811 after touching $1.3879, matching the strongest level since April 11th.
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, was little changed at 1,010.73. The pound climbed 0.1 percent to $1.6830. It reached $1.6853 yesterday, the highest level since November 2009.
The yen weakened, dropping most against its higher-yielding peers, as sanctions on Russia that failed to penalize the country’s major companies or banks boosted investors’ risk-taking appetites.
The real is the biggest winner this year, up 5.9 percent, followed by New Zealand’s kiwi, gaining 4.1 percent. The largest decliners were Canada’s dollar, down 3 percent, and the krona, off 2 percent.
Bonds briefing
Benchmark 10-year yields fell one basis point, or 0.01 percentage point, to 2.69 percent early evening New York time. The 2.75 percent note due in February 2024 rose 2/32 or 63 cents to 100 15/32. The yield climbed four basis points yesterday, the first increase since April 17th.
Treasuries have gained 0.4 percent this month, the most since a 1.8 percent advance in January, and have added 2.1 percent this year through yesterday. Thirty-year bonds have gained 10.4 percent this year, the most since records began in 1987, according to Bank of America Merrill Lynch index (BGSV) data. Treasuries were poised for the best month since January as the Federal Reserve started a two-day meeting, with economists forecasting policy makers will scale back their monthly debt-buying program.
Fundamental policy decisions and high impact news events for April 30th
Wednesday the preliminary industrial production month on month data for Japan is published with the prediction that the figure will be 0.6%. The ANZ business confidence survey is also published. From Japan we receive the monetary policy report, whilst housing starts are predicted to have fallen by -2.8%. German retail sales are anticipated to have fallen by -0.6%. The BOJ will publish its outlook report and will hold a press conference. French consumer spending month on month is expected to have risen by 0.3%. Spanish flash GDP QoQ is expected to have risen by 0.2%. Germany’s unemployment number is expected to have fallen by -10K. Italy’s unemployment rate is predicted to remain at 13%. The CPI flash estimate for Europe is anticipated in at 0.8% year on year.
From the USA we receive the latest ADP jobs report with the anticipation that an extra 203K jobs will have been created. Canada’s GDP is expected to come in at 0.2% up month on month, whilst the advance GDP quarter reading for the USA is expected in at 1.2%. The Chicago PMI is expected in at 56.6. The FOMC will issue a statement, with the funding rate predicted to stay at 0.25%.
