March 21. Troubling economic data….
–Global economic news paints a grim picture. German flash PMI down, France PMI the lowest in 4 years nearing the absolute nadir of the crisis from 2009. Cyprus remains on bank holiday, with the ECB saying it will withdraw assistance if there is no deal by Monday. Japan’s Trade deficit hit a new record low with exports -2.9%. (Partly due to the timing of China’s lunar year holiday, but China had already been shunning Japan’s goods). In the US, FedEx profit fell 31%, shares plunged 7% as customers switch from next day deliveries to slower and cheaper shipping. Caterpillar disclosed that on a 3 month rolling average ended Feb, global retail sales were down 13% from year ago: (MktWatch) Cat’s “…Sales tumbled 26% in the key Asia/Pacific region, which includes China and Australia. They were down 12% in North America and fell 9% in Europe”. ZH has an interesting chart that shows HSBC PMI up, but electricity production DOWN 14% (again, perhaps related to lunar New Year?). http://www.zerohedge.com/news/2013-03-20/wtf-chart-day-china-pmi-vs-electricity-production
From BBG: “Sales at casual-dining establishments fell 5.4 percent last month, after declining 0.6 percent in January and 1.6 percent in Dec….the first three months of consecutive declines in almost three years.” In the Bernanke press conference yesterday, a reporter noted that the past two years had been strong in the first quarter, but then rolled over. I don’t recall the exact response, it was something soothing, something about the WEATHER, that weather related disturbances had been a previous factor, but we’ll be ok this year. I thought the weather excuse was for retailers that had fallen short of sales expectations, NOT for the leader of the Central Bank…but BB probably feels that since he’s bought in to the retail mentality that stocks can and SHOULD always go up, he might as well go “all-in”.
–News today includes Job Claims expected 340k. Flash PMI expected 55, Existing Homes 5mio, Philly Fed expected -1.5 from dismal -12.5 last time, Leading Indicators +0.4%.
–In eurodollars, curve steepened a bit, pressure on near contracts eased as Cyprus is duly dismissed, though there was a buyer of 10k April 9925p for 0.25.
