Daily Interest Rate Monitor – May 3

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Weekly Eurozone Watch – ECB Cuts

Key Data Points
German 10-year Bund 3 bps higher;
France 5 bps wider to the Bund;
Belgium 7 bps tighter;
Ireland 25 bps tighter;
Italy 27 bps tighter;
Spain 27 bps tighter;
Portugal 40 bps tighter;
Greece 165 bps tighter;

Large Eurozone banks weekly change, 0.61. to 13.45 percent;
Euro$ down  0.41 percent.

Comments

- Italy, Spain, and Ireland sovereign spreads over the Bund at lowest weekly close since beginning of the crisis;
- The European Central Bank delivered an emergency quarter-point cut in interest rates – but president, Mario Draghi,  cautioned governments in the recession-hit eurozone against “unravelling” their austerity policies.  – Heather Stewart,  Guardian;
- The European commission warned the recession will be deeper than previously feared this year, reducing its outlook for crisis-stricken Cyprus and downgrading the prospects of the biggest economies.  – Katie Allen,  Guardian;
- Final Eurozone Manufacturing PMI moved to a 4-month low of 46.7m contracting for the twenty-first successive month;
- German output contracted for the first time in 2013;
- All national PMIs signaled contraction;
- Germany’s DAX stock exchange closed at its highest ever level.

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Eurozone recession bites deeper – economy

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U.S. Employment Situation – April 2013

Nonfarm payrolls beat expectations, including some nice upward revisions.  The data reverses the pessimism that was building about a summer swoon.  The S&P500  couldn’t of had a better set-up going into the number.

Here’s the BLS,

Total nonfarm payroll employment rose by 165,000 in April, and the unemployment  rate was little changed at 7.5 percent, the U.S. Bureau of Labor Statistics  reported today. Employment increased in professional and business services,  food services and drinking places, retail trade, and health care…

The change in total nonfarm payroll employment for February was revised from +268,000 to +332,000, and the change for March was revised from +88,000 to +138,000. With these revisions, employment gains in February and March combined were 114,000 higher than previously reported.

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Stratfor: Saudi Arabia’s Demographic Challenge

Stratfor Middle East Analyst Ashley Lindsey discusses Saudi Arabia’s demographic challenge of educating its young population and integrating more women into its work force.
For more analysis, visit: http://www.Stratfor.com

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U.S. Equity Sector ETF – Daily Performance

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Daily Interest Rate Monitor – May 2

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World’s Fastest & Slowest Growing Economies

Here’s our update of last November’s post of the world’s fastest and slowest growing economies ranked by 2013 GDP growth.  The growth estimates and nominal GDP data are from the April IMF World Economic Outlook database.

We still note, the law of small numbers in the growth economies.  Excluding China from the Top 40, for example,  the 39 fastest growing economies in 2013 have an average size of $78 billion.  This contrasts to the slowest growth economies with an average nominal GDP in dollar of $470 billion.  Note Germany’s rank as the 23rd slowest growth economy.  Furthermore,  5 of top 11 slowest economies are eurozone countries.

Similar to stocks, growth is, generally, in the  “small cap” countries.

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Daily Interest Rate Monitor – May 1

May ushers in the deflation trade.

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U.S. Equity Sector ETF – Daily Performance

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Stratfor: Italy’s New Government

Stratfor Europe Analyst Adriano Bosoni discusses how Italy’s new government could bring some short-term stability to the country, but long-term challenges will remain.
For more analysis, visit: http://www.Stratfor.com

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