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St George Economics economy and finance update

Share Markets:

US equity markets nudged to new records with the Dow again closing above 15,000.

Good profit results from Disney Corporation; strong industrial production data out of Germany (see below) and positive comments by an ECB official on the ECB's capacity to take further stimulatory measures, added to investor confidence.

The Dax rose 0.8%, the FTSE100 was up 0.4% as was the US S&P500.
 

Bonds:

With no US data released last night, fixed interest markets were subdued.

US long bond yields fell 1 basis point to 1.77% while German 10 year government bond yields fell 3 basis points to 1.27%.

In Australia 10 year bond yields rose 5 basis points to 3.12%.
 

Foreign Exchange: 

The USD weakened against the euro on comments made by ECB official Yves Mersch and as German industrial production rose.

These events also saw the AUD weaken against the euro.
 

Commodities: 

The weaker USD saw gold and oil prices move higher.

Copper prices lifted in response to firmer trade data out of China (see below) and the better than expected German industrial production results for March.
 

Australia:

Today sees the labour force figures for April. We expect job growth close to 10k with the unemployment rate edging up to 5.7%.
 

China:

The trade data was stronger than expected, with the trade surplus rising to US$18.16bn in April, from a small deficit of US$0.88bn in March.

Exports jumped 14.7% in the year to April, up from a 10.0% annual rate in the year to March.

Import growth was also stronger, rising to 16.8% in the year to April, from 14.1% in the year to March. 
 

Europe:

German industrial production rose 1.2% in March, on top of a 0.6% gain in February.

These were the first back to back gains in industrial production since April-May 2011.

The detail showed manufacturing up 1.4%, energy up 4% (it was very cold) and construction down 3.1% in March.

Despite the recent gains, industrial production is still down 2.5% on a year earlier.
 

United Kingdom:

The Halifax bank reported that UK house prices rose 2.0% in the year to April, their fastest pace of growth since late 2010.
 

United States:

No data released.

 

Please read the disclaimer below:

The information contained in this report (the Information) is provided for, and is only to be used by, persons in Australia. The information may not comply with the laws of another jurisdiction. The Information is general in nature and does not take into account the particular investment objectives or financial situation of any potential reader. It does not constitute, and should not be relied on as, financial or investment advice or recommendations (expressed or implied) and is not an invitation to take up securities or other financial products or services. No decision should be made on the basis of the Information without first seeking expert financial advice. For persons with whom St.George has a contract to supply Information, the supply of the Information is made under that contract and St.George's agreed terms of supply apply. St.George does not represent or guarantee that the Information is accurate or free from errors or omissions and St.George disclaims any duty of care in relation to the Information and liability for any reliance on investment decisions made using the Information. The Information is subject to change. Terms, conditions and any fees apply to St. George products and details are available. St.George or its officers, agents or employees (including persons involved in preparation of the Information) may have financial interests in the markets discussed in the Information. St.George owns copyright in the Information unless otherwise indicated. The Information should not be reproduced, distributed, linked or transmitted without the written consent of St.George.

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