The MorningSnapshot- 04/27

The MorningSnapshot
April 27, 2012

Morning Commentary
Sentiment is surprisingly rebounding this morning after S&P cut Spain’s credit rating two notches to BBB+ yesterday and as Italy failed to meet their maximum borrowing target at a 10yr bond auction. German confidence, French consumer spending, and Spanish unemployment all came in worse than analyst estimates. The one bright data point out of Europe this morning was Italian retail sales beating estimates. The dollar is declining against its G-10 counterparts as S&P 500 futures remain at depressed levels; European stocks are mixed. U.S. treasury yields are reaching new lows since February as investors bid-up “risk-free” securities. Commodities are mixed, with energy falling and metals mostly higher. The yen is stronger this morning after the BOJ increased asset purchases, but only by the low-end of expectations.

Today’s Economic Data Lineup (EST)
8:30am: GDP (Q/q) (Annualized) 1Q A, est. 2.5%, prior 3.0%
8:30am: Employment Cost Index, 1Q, est. 0.5%, prior 0.5% (revised)
8:30am: Personal Consump, 1Q A, est. 2.3%, prior 2.1%
8:30am: GDP Price Index, 1Q A, est. 2.1%, prior 0.9%
8:30am: Core PCE (Q/q), 1Q A, est. 2.1%, prior 1.3%
9:55am: U.Mich Confidence, Apr. F, est. 75.7, prior 75.7
11:00am: Fed to sell $8b-$8.75b notes in 6/15/2014 to 4/15/2015 range

North America

  • The U.S. economy expanded less than forecast in Q1 with GDP coming in at 2.2%, lower than the 2.5% median estimate from economists surveyed by Bloomberg. Household purchases (which accounts for ~70% of the economy) did exceed expectations, increasing 2.9%.

Europe

  • The Dutch government struck an emergency austerity deal with the opposition to meet EU budget rules, dampening the prospect that the Netherlands will lose its top credit rating.
  • U.K. consumer confidence came in unchanged this month and is increasingly unlikely to improve as data this week showed the economy has slipped into its first double-dip recession since 1975.
  • French consumer spending declined in March as demand for energy waned and households reduced food purchases. Spending declined -2.9% from February when it rose a revised +2.9; economists had expected a drop of -1.9%. French unemployment is nearing 10%.

Asia/Pacific

  • The BOJ expanded its government-bond asset purchases by $124B amid signs of a slowing economy and increasing pressure from lawmakers for more aggressive steps. More stimulus could come as early and July, when the BOJ will review forecasts released today.
  • South Korea’s current account surplus widened in March to a four-month high as overseas shipments of everything from cars and electronics to oil products rose. The excess came in at $3B versus $557M in February.
  • Chinese industrial companies’ profit rose +4.5% in March, rebounding as demand begins to strengthen.

“Each morning when I open my eyes I say to myself: I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it.”
-Julius Henry “Groucho” Marx
____________________________
Taylor Anderson
Business Analyst
Clearing House

T 312 634 8902
F 312 930 3187
C 312 618 8339

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