Developing-country shares posted the steepest drop in a month after the Chinese government data showed a decline in bank lending and the slowest money-supply expansion on record, prompting concerns the world second’s largest economy is slowing down. The benchmark MSCI Emerging Market Index dropped 1.2% with China’s Shanghai Composite Index slumping at least 1.4%. Brazil’s benchmark Ibovespa stock gauge fell 1.4% and the country’s commodity-related shares tumbled amid growth concerns in China, Brazil’s top trading partner.
Russia canceled its second local-currency government debt auction in a row and sixth in the previous seven weeks as borrowing costs jumped the most in a week amid renewed concerns over the country’s conflict with Ukraine. The yield on Russia’s ruble bonds due February 2027 climbed 13 basis points (bps) yesterday as geopolitical tensions intensified over the weekend. Notably, yields on Russia’s benchmark debt jumped 53 bps in March, posting the largest monthly increase since last May, as the country annexed Ukraine’s Crimea region.
High Income Economies
U.S. consumer prices rose by 0.2% (m/m) in March after inching up by 0.1% in February and in January. The larger than expected increase was mainly due to higher prices for food, which rose by 0.4% for the second consecutive month. Meanwhile, energy prices edged down by 0.1% in March, after falling by 0.5% in February. The core consumer price index, which excludes food and energy prices, rose by 0.2% in March after ticking up by 0.1% for three straight months.
The economic expectations index, which gauges German investor sentiment, dropped for the fourth straight month from 46.6 in March to 43.2, the lowest since August 2013. The lower-than-expected reading was driven by the conflict in Ukraine. Meanwhile, a larger Eurozone trade surplus for February helped to slightly ease concerns regarding a strong euro. In contrast, the current conditions index rose to 59.5, the highest level since July 2011, from 51.3 in March.
Europe and Central Asia
Turkey’s unemployment rate eased in January compared to a year ago, with the unadjusted jobless rate falling to 10.1% from 10.6% in the same month last year, while the seasonally adjusted jobless rate dropped to 9.1% from 9.5% the previous year. Month-on-month, the unemployment rate edged up slightly from 10% in December.
India’s wholesale price inflation accelerated to a three-month high of 5.7% (y/y) in March from 4.7% (y/y) in February, driven by higher prices of food, fuel and manufactured goods. Year-on-year food prices rose to 9.9% in March from 8.1% in February; prices of manufactured goods rose to 3.2% from 2.7%; and cost of fuel and power climbed 11.2%. Month-on-month, wholesale prices rose 0.5%.
Nigeria’s consumer price inflation edged up slightly to 7.8% (y/y) in March from 7.7% in February, remaining within the central bank’s target band of 6%-9% for 2014. This increase was mainly due to higher food prices, which rose to 9.3% (y/y) from 9.2% in February. Month-on-month prices rose 0.8% in March, up from 0.5% in February.
Ghana’s economy expanded at the seasonally adjusted rate of 2.7% (q/q) in Q4 2013 after contracting by 4.4% (q/q) in Q3. Driving the rebound in Q4, the agriculture sector grew 4.8% (q/q), the industrial sector contracted at a slower 1.3% (q/q) pace owing to an increase in mining production, and service activities expanded 2.1% (q/q). Year-on-year GDP growth rose 4.9% in Q4.