China’s Inflation Remains at 2.30% in April

Daily Analysis - 10/05/2016

China's Inflation Remains Steady at 2.30% in April


The consumer price index in China was unchanged last month indicating that inflationary pressures are remaining constant. April's 2.30% increase marks a third month of the CPI rising at 2.30%. The PPI was also showing signs of a modest improvement, falling 3.40% in April following a 4.30% decline in March and rising for the fourth consecutive month after PPI fell 5.90% between August through December 2015.

German Factory Orders Surge in March

Factory orders in Germany for the month of March increased 1.90% beating estimates of 0.70% and reversing the revised 0.80% decline from February, according to data released on Monday from the German statistics office Destatis. The strong 1.90% gains came with an increase in capital goods orders, which rose by 4.0% with a 1.60% increase in consumer goods on a month over month basis. The 1.90% rise in factory orders comes after orders slumped for two consecutive months previously. Non-euro export orders increased 6.20% but domestic orders fell 1.20% in March. On a year over year basis, German factory orders increased 1.70% much more than the 0.70% y/y growth seen in February.


Japanese Finance Minister: We’re Ready to Intervene in FX Markets

Finance Minister Taro Aso told the Japanese parliament on Monday that the government was ready to intervene in the currency markets to stem the strong appreciation in the yen. He said that the strong volatility was not good for trade or for the economy. However, despite using strong language the yen did not react much when the news broke. Japan has attempted many times in recent months to verbally talk down the yen with little affect. Recently, the US Treasury Department's semi-annual report to Congress on currencies named Japan along with four other countries that actively weaken their currencies in order to boost their exports. According to the report, such practices are deemed manipulative as it affects both the US and global trade at large. Based on the existing trade laws, US could impose penalties on such countries. Reflecting on this, the Japanese finance minister said that Tokyo and Washington disagreed on currency policy.


Oil Snaps a 3-Day Winning Streak

WTI crude oil prices for June delivery turned bearish yesterday, snapping a three day winning streak after posting a session high of $45.93. Last week oil posted steady gains after Canada, an oil producer and exporter, witnessed one of the most destructive wildfires in recent times, estimated to have knocked out over a million barrels in daily production. The wildfires which broke out in early May raged out of control and led three major oil firms to issue warnings that they might not be able to deliver their contracts for Canadian crude. Last Friday, Saudi Arabia sacked its veteran oil minister Ali al-Naimi after nearly two decades of serving as the position. The move came as last month Saudi Arabia announced an ambitious plan to transform its economy and reduce it’s over reliance on oil.


Norway’s CPI Expected to Slow in April

The consumer price index in Norway is expected to indicate a slower pace inflation in April at 0.30%, extending the declines after a sharp jump in January this year. Inflation surprised to the upside in January, rising 0.60%, after December's 0.40% declines. However, inflation has moderated since February, rising 0.50%. On an annual basis the CPI is expected to remain at 3.30%, rising at the same pace as in March. The Norges Bank will be meeting on Thursday for its monetary policy meeting which will be influenced by today's inflation report, which as of March remains above the central bank's mandated target rate of 2.50%. The Norges bank currently maintains a 0.50% interest rate.


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