The pattern of the last weeks is starting to get familiar: The economic news was satisfying. There was unrest about Greece and again an agreement seems nearby. The resistance of the people is growing in and outside Greece. Even the finance minister of Luxembourg is now saying that Greece has to accept everything and to has to take its poison because Europe can stand a default of Greece very well. So he got his portion of blame because things are not that sure.
In the US the initial claims for unemployment declined prosperously to below 350,000 and that points to maybe even 4% growth in Q1.
The retail sales grew ncely +0.5% even with the strange fall of vehicle sales (while light vehicle sales were up a lot). The saving rate is OK again and doesn’t need to go up further. The NFIB survey for small and mid size companies was a bit higher. The forerunners of the ISM Phillyfed and Empire State survey were more in the plus than thought (=ISM will rise this month). The best news was the jump in the BAHMI that indicates how optimistic the home builders are. Already for quite some time less houses are started than new homes are sold, so the builders are getting rid fast of their inventories and are becoming less pessimistic.
The inflation declined as well CPI as PPI. After April a further rise of rents will stop the decline of the CPI and when Iran gets out of control oil price will add to inflation. The use of energy is at the moment extremely low in the US because of the hot winter and less gasoline sold. All OPEC members produce more than their quota so including lower growth in China the oil price should not go up ex Iran.
China promised to help Europe again and started special vehicles for investing abroad (yuan 50B last week). The Peoples Bank of China lowered the reserve requirement ratio with 0.5% (to 20.5% for large banks). GDP growth is too low now.
In Germany the sentiment indicator for the economy ZEW was good, pointing to positive growth in Q1.
In the UK the inflation declined a lot and the consumer confidence grew strongly.
The interest rate differentials of the euro periphery/ France with Germany didn’t move much despite good placements of government bonds.
In Japan the GDP growth in Q4 was negative, but the Tertiary Industry Index was up considerably (this service industry indicator points to better growth in Q1). The most important news was the Bank of Japan implementing new QE of 10T yen and BoJ has now an inflation target of 1% (0% is too low, deflation is bad).
In India the inflation surprised enough to the downside for the central bank to get in the easing mode. They did a QE of 10B rupeeh for buying of government bonds. In Indonesia the interest rates were lowered (again) by 1%.