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Prospects Daily: Gold prices recover slightly, UK retail sales up in Q1, Mexico’s unemployment rate falls

Financial Markets… The yen fell for a fourth day versus the dollar on Friday, sliding 1% to 99.14 in morning trade, after the Japanese finance minister said the country’s monetary easing policies that have weakened the currency has not met with opposition at the G20 meeting. Japan’s currency also fell 1.2% versus the euro to 129.66.

Gold prices extended their gains today, rising as much as 2.6% to $1,426.05 an ounce, as investors took advantage of the biggest slump in the metal in three decades. Gold has plunged 16% thus far this year as it sank 14% in two days through April 15 as growing risk appetite damped demand for the precious metal as a safe-haven asset.

Developing-country stocks rallied today, as the benchmark MSCI Emerging Market Index gearing for the biggest advance in 15 weeks, supported by sharp gains in Chinese and South African shares. China’s Shanghai Composite Index rose 2.1%, the most in a month, while South Africa’s JSE index gained 1.4% as gold prices bounced back. 

High-income EconomiesCanada’s inflation rate slowed to 1% (y/y) in March as gasoline prices dropped, following a 1.2% gain the previous month. With the economy softening, and inflation at the bottom of the central bank target range of 1-3%, the benchmark interest rate has been kept at 1% since September 2010.

UK retail sales volumes including auto fuel slipped 0.7% (m/m sa), partially offsetting February's 2.1% rise. Over the course of the first quarter however, sales were up 1.7% (q/q, saar) after contracting by 1.5% in Q4 last year.

Italian
industrial new orders continued to fall sharply in February. On a seasonally adjusted basis, new orders fell 2.5% (m/m)in February led by a 2.3% fall in domestic and 2.6% decline in overseas orders.  Overall, in the three months to February, new orders fell by 12.3% (3m/3m saar), after dropping by 14.8% in January.

Developing EconomiesLatin America and the Caribbean: Mexico's unemployment rate decreased for the second successive month in March to 4.5% from 4.9% in February.

Middle East and North Africa:
Inflation in Algeria continued to slow, falling to 4.42% in March compared to 7.81% (y/y) in January. The deceleration has been supported by slower growth in food prices. Prices rose by nearly 9% in 2012, their largest gain since 1996 when Algeria was stuck in a decade-long civil war, mainly due to higher food prices which have a weighting of around 43% in the consumer price index.

East Asia and the Pacific:
The Conference Board’s Leading Economic Index for China was unchanged in March at 258.3, after a 1.2% gain in February and 1.7% rise in January, suggesting that the economy is continuing to soften.