Succinct summation of week’s events
Positives:
1) Initial Jobless Claims fall to 351k, matching the lowest level since Mar ’08
2) Feb Retail Sales grow in line with estimates and Jan revised higher. Will it continue with gasoline prices .26 above Feb avg?, 3) Philly and NY mfr’g surveys rise but components mixed as New Orders fall in both
4) Within MBA data, purchase apps rise to 8 week high
5) FOMC meets and thankfully does nothing
6) ZEW investor confidence in German economy over next 6 months rises to 22.3 from 5.4, well above expectations of 10 and to the best level since June ’10
Negatives:
1) Global interest rates jump higher with 10 yr US yield in particular up by 30 bps to highest since late Oct and UK gilt yield also spikes 30 bps. Bond rally since Operation Twist talk began last Aug has evaporated $100’s of billions later
2) CPI up 2.9% y/o/y, in line but still elevated compared to wage growth and Fed’s target rate of 2.0%. PPI up 3.3% y/o/y and Import Prices up 5.5% y/o/y
3) Implied inflation expectations in 5 yr and 10 yr TIPS continue higher to most since last summer
4) UoM confidence unexpectedly falls 1 pt as one year inflation expectations jump to 4% from 3.3% to the highest since May, 5) Bankrate.com says avg 30 mortgage rate rises to 4.03% vs 3.88% on the week, highest since late Nov but still extraordinarily low though
6) MBA said refi apps fell to 9 week low
7) Gasoline prices rise another .07 on the week to $3.82 according to AAA
8) NFIB small business optimism index up but less than expected and Plans To Hire falls for 3rd straight month, in contrast to payroll optimism
9) FDI in China falls unexpectedly for 4th straight month
10) India keeps rates unchanged as wholesale inflation up more than expected
11) UK unemployment holds at 8.4%, the highest since ’95 as jobless claims rise more than expected.
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