DATA SNAP

DATA SNAP: UK BRC Mar Same-Store Retail Sales -1.2% On Yr

LONDON (Dow Jones)--U.K. retail sales fell again in March, despite recent signs of growing consumer confidence and housing market stabilization, indicating ahead of next week's budget that the government's value-added tax cut has failed to boost spending. 

That spells bad news for Prime Minister Gordon Brown's government, which put a 2.5-percentage-point cut in VAT at the center of its GBP20 billion November stimulus plan. 

Data Thursday from the British Retail Consortium showed March's same-store sales values fell 1.2% on the year, while total sales values - including those in new store space - were up 0.6%. In February, same-store sales fell 1.8% and total sales rose 0.1%. 

While food and clothing sales values rose on the year, most sectors saw like-for-like sales down from a year earlier, the BRC said, cautioning that the timing of Easter made year-on-year comparisons difficult. 

The March figures were slightly better than expected, as economists surveyed by Dow Jones Newswires last week had forecast total sales to decline 1.4% on the year. 

"Customers are still worried about their jobs and their own finances - so they're keeping spending under tight control," said Stephen Robertson, director general of the BRC. "We've now seen negative sales in nine of the past 10 months." 

The latest BRC report will intensify debate about the precise state of the U.K. consumer amid an increasingly severe recession. 

A series of stronger-than-expected official retail sales reports raised questions about the resilience of the U.K. consumer. But the March BRC numbers chime better with the 0.7% decline in household expenditure in the fourth quarter, the biggest quarterly drop in consumer spending since 1991. 

The U.K. economy is in recession, having contracted 0.7% in the third quarter and 1.6% in the fourth quarter, its weakest performance since 1980. In response, the Bank of England has cut its key interest rate from 5% in early October to 0.5%, the lowest level since the central bank was founded in 1694. 

The BRC also reported that in the three months to March, like-for-like sales were down 0.7% from a year earlier. Total sales in the latest quarter from a year earlier were up 1.2%. 

Helen Dickinson, head of retail at KPMG, said the survey highlighted the need to "remain cautious in drawing conclusions about the prospects for retail spending." 

   The BRC survey covered the four weeks from March 1 to April 4.       BRC Web site: http://www.brc.org.uk   

-By Joe Parkinson, Dow Jones Newswires; 44 20 7842 9291; joe.parkinson@dowjones.com 

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=ZoEQ9VJtYzxGsJmjLFOE1Q%3D%3D. You can use this link on the day this article is published and the following day. 

GLOBAL MARKETS:

GLOBAL MARKETS: European Stocks Seen Up; Global Rally Ongoing

Thu, Apr 16 2009, 06:29 GMT
http://www.djnewswires.com/eu

GLOBAL MARKETS: European Stocks Seen Up; Global Rally Ongoing

     By Andrea Tryphonides     Of DOW JONES NEWSWIRES   

LONDON (Dow Jones)--European stocks are expected to open higher Thursday after a strong finish on Wall Street Wednesday and a rally in Asia as China's GDP was seen in a favorable light, helping foster the idea a recovery may not be far away. 

Matt Buckland, dealer at CMC Markets said the Chinese GDP data "could have been worse," which will add to the European session's strength after it provided a boost to the major indexes in Asia. 

Buckland called London's FTSE 100 index up 29 points, or 0.7%, at 3997.0, Frankfurt's DAX index up 42 points, or 0.9%, at 4591.0 and the CAC-40 index in Paris 28 points, or 0.9%, higher at 3014.0. 

China's first quarter gross domestic product data were also encouraging - if not as much as some speculation had hoped. GDP grew 6.1% on the year, slightly better than the 6.0% tipped in a Dow Jones Newswires poll of economists, while first quarter urban fixed-asset investment rose 28.6% on the year, above the 26.5% forecast. 

"To me the Chinese numbers were largely expected," said Chris Weston, institutional dealer at IG Markets. "However the numbers did not fall off a cliff and generally show a bottoming process in their economy," he said. 

As a result, Asian share markets were mostly higher, with Japan's Nikkei 225 closing up 0.14% and South Korea's Kospi Composite 0.3% higher. Taiwan shares were up 2.1% and Hong Kong's Hang Seng Index was up 0.3%, climbing up from earlier lows. 

Still, "earnings news from JP Morgan stands to keep the banking sector in focus too and could well produce further volatility," Buckland warned. 

In the U.S. Wednesday, stocks surged and the Dow Jones Industrial Average closed more than 100 points higher as investors concentrated on signs of a turn in economic demand in comments from International Paper, Intel and in federal government data. 

Stocks added to gains after the Federal Reserve's regional report, or Beige Book, showed that while consumer spending remained generally weak, some districts reported that sales rose slightly or declines moderated. 

The DJIA rose 1.4% to 8029.62 and the broad Standard & Poor's 500 index rose 1.3% to 852.06. The Nasdaq Composite rose 0.1%, weighed down by Intel, which warned it expects second-quarter revenue that is flat to slightly lower than the first-quarter level. Still, Intel said the personal-computer market was likely past its worst. 

In the foreign exchanges, the dollar slipped against the yen. Analysts said that although the China GDP figure was slightly better than some forecasts, currency players had been factoring in a stronger figure and so the greenback was sold in favor of the yen, perceived as a less risky play. 

At 0620 GMT, the U.S. dollar stood at Y98.98, from Y99.46 late in New York, and the euro at Y130.64 versus Y131.56. The single currency was at $1.3205, from $1.3225. 

The positive tone in the equity markets has resulted in a move away from the perceived safe haven of sovereign debt, and at 0625 GMT the June bund contract stood at 122.67, down 0.27. 

Meanwhile, the front-month Nymex crude oil futures contract was up 49 cents at $49.74 a barrel, after slipping 16 cents in New York. Spot gold was down only $1 from New York, at $892.10 a troy ounce. 

In economic news, the euro-zone consumer price index is expected at 0900 GMT along with industrial production. In terms of individual stocks, Groupe Danone will be in focus after it reported a 2.3% fall in first-quarter revenue, held back by weaker consumer spending in dairy. And Roche Holding AG reported a 7% increase in first-quarter revenue, driven by brisk sales of its portfolio of cancer drugs. 

-By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com 

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=YMoVESPZ%2BrZ15kVS1YhILg%3D%3D. You can use this link on the day this article is published and the following day. 

USD

USD mixed across the board

 

FXstreet.com (Buenos Aires) - Dollar ends another day mixed across the board, after Gbp, Aud and Cad appreciate to multi weeks high and remain close to those levels, while Japanese Yen, Swiss Franc and specially Euro that came under pressure Wednesday with a pullback in assets associated with risk and on mounting expectations for non-standard policy measures from the ECB, lost ground. Despite the European currency remains bearish, further losses were halted by a late rally in Wall Street, that after a negative starting, managed to close the day gaining 109 points, again barely above the 8000 points level, still struggling to define a trend. Fed’s Beige book, released late in the American afternoon, show that 5 of the 12 districts noted a moderation in the pace of decline, and several signs that activity is some sectors was stabilizing at a low level. Despite that, manufacturing activity weakened across the country. Beige book also show housing markets remained depressed overall, but there were some signs that conditions may be stabilizing. 

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Asia Session

 

 Risk aversion seemed to flee from the markets today in Asia as stocks followed the path forged by Wall Street earlier, but a less than stellar Chinese GDP number sent buyers to the Yen and Dollar. Early deals in Asia saw the Aussie and other high yielders such as the Kiwi Dollars gain good ground early on, with the AUD/USD hitting .7314, and AUD/JPY hitting 72.74 on murmurs that the upcoming Chinese GDP data would be better than expected. As well, NZD/USD hit 0.5935 and NZD/JPY hit 57.85 but once the GDP came out at 6.1% when most were expecting a number closer to 8% the hammer fell and traders fled to the Yen and US Dollar. From the highs, the AUD/JPY lost a full big figure and the NZD/JPY lost a little over a big figure as well.

USD/JPY made a move from 99.50 to 98.91 and the EUR/JPY fell from just under 132.00 to lows under 130.40 in a pretty swift move. The move was a routine risk adverse play even in the face of higher equities. The Dollar improved against the Euro on the data, as the EUR/USD pair fell from 1.3268 to current lows at 1.3180 as of this writing. The markets will look to tomorrow's earnings reports for a few of the big financial institutions in the US to se which path to take.....risky, or risk adverse.

Upcoming Economic Data Releases (London Session):

4/15/2009	23:01	UK	BRC March Retail Sales Monitor	15-Apr
4/16/2009	6:00	EC	EU 25 New Car Registrations	MAR	-18.00%	- -
4/16/2009	7:15	SZ	Producer & Import Prices (MoM)	MAR	-0.60%	-0.20%
4/16/2009	7:15	SZ	Producer & Import Prices (YoY)	MAR	-1.80%	-2.40%
4/16/2009	9:00	EC	Euro-Zone CPI (MoM)	MAR	0.40%	0.40%
4/16/2009	9:00	EC	Euro-Zone CPI (YoY)	MAR F	0.60%	0.60%
4/16/2009	9:00	EC	Euro-Zone CPI - Core (YoY)	MAR	1.70%	1.40%
4/16/2009	9:00	EC	Euro-Zone Ind. Prod. sa (MoM)	FEB	-3.50%	-2.50%
4/16/2009	9:00	EC	Euro-Zone Ind. Prod. wda (YoY)	FEB	-17.30%	-18.00%

Daily Market Outlook

 

   U.S. dollar rises on Wednesday on lowered risk appetite

The greenback strengthened against most of the major currencies on Wednesday as investors continued to buy the safe-haven U.S. dollar due to persistent worries over the economic recession. In late New York afternoon session, the ICE futures dollar index eased from intra-day high of 85.343 and was last trading up 0.11 percent to 84.888. The dollar rose to session highs of 99.68 and 1.1488 versus the yen and swiss franc respectively in earlier session before profit-taking occurred.  

  
The euro came under pressure after ECB Governing Council member Axel Weber said the central bank will announce a package of ‘non-standard measures’ to boost the eurozone economy in May. The single currency fell to as low as 1.3146, 0.8787 and 129.91 against the dollar, sterling and yen respectively before stabilising.  
  
Meanwhile, the British pound rallied above 1.5000 against the dollar and touched a multi-month high of 1.5038 as Royal Institution of Chartered Surveyors showed that the slump in U.K. house prices eased last month after more than a year of declines lured buyers back into the market. The number of real-estate agents and surveyors saying prices fell was 73.1 percentage in March, compared with 78.1 in February (the highest figure in 13 months).   
  
On the data front, German wholesale prices dropped the most in more than 22 years in March after energy costs and prices for agricultural goods plunged, falling 8 percent from a year earlier after a 5.7 percent decline in February. Other reports from U.S. showed that manufacturing in the New York region contracted by the least since September, posting a -14.7 reading compared with -38.23 in March while industrial production in the U.S. fell 1.5 percent in March (14th time in the last 15 months) as factories trimmed unwanted stockpiles.  
  
Economic data releases on Thursday include U.K. BRC retail sales, Japan machine tools orders, Switzerland’s PPI data, eurozone HICP final, industrial orders, and U.S. building permits, housing starts, weekly jobless claims and Philadelphia Fed survey.

Financial And Capital Markets

The Financial And Capital Markets

Capital markets have maintained their broad recovery; but price action seems to be outpacing sentiment. US equities have recovered nearly 20 percent since hitting their decade lows over a month and a half ago; physical commodities have reversed course after months of basing; and risk premiums in debt and derivative markets have shrank. However, despite these improvements, positive growth is still a distant hope and financial uncertainties still very real threats. Policy officials, economists and traders unanimously forecast an eventual recovery in global expansion sometime either later this year or through the first half of 2010. However, whereas politicians and academics can afford to have a long-term outlook, market participants cannot. An ongoing recession dampens rates of return, stifles capital investment and puts the breaks on production. Altogether, the economic hardship is the fuel for a bear market – so how stable is this ‘market recovery?’

 

A Closer Look At Market Conditions

Over the past week, capital markets struggled to keep the momentum behind the developing rebound from late February lows. The Dow has struggled to keep its pace following its push through 8,000 as last week’s drop in liquidity preceded the start of earnings’ season. With most economic parties forecasting a sharper pace of contraction through the first quarter (not much of a stretch considering the horrible monthly data that has crossed the wires), investors are looking for see how revenues fared. This could act as justification or a contradiction to the fragile rebound in investor optimism. Commodities have responded with greater caution with demand wholly in flux.

In gauging the health of the markets, we have to balance the health of risk and return. For a genuine recovery to develop, investors need to see real evidence for a returns to grow and encourage competition amongst investment classes; and they have to be able to comfortably assume there are no major threats to the normal functioning of the markets. In the recent rebound in price action we have been seeing, the development has been completely on the side of risk. It has been months since a major bank or industry has teetered on the edge of collapse (and threatened the credit market), which is allowing for equity in the absence of panic. Without growth, though, this advance may fail.