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Global Daily: U.S. IP Growth at 17-Month High

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Financial Markets

 

Qatar’s government is planning to return to international bond market as the world biggest exporter of liquefied natural gas seeks to fund a budget deficit affected by falling energy prices. The offering, the Persian Gulf nation’s first one since July 2012, will seek to raise about $5 billion in multiple tranches.  International debt sales from the six-nation Gulf Cooperation Council surged by 32 percent to a total of $15.9 billion this year (including private placement issuance).

 

Oil prices jumped to a 7-month high on Tuesday amid growing speculation that the recent output disruptions, notably in Canada and Nigeria, will whittle away the global supply excess.  Brent, the global benchmark, rose 0.9 percent to $49.39 a barrel, while West Texas Intermediate (WTI), the U.S. benchmark, climbed 1 percent to $48.18 a barrel, the highest level since early October.  Prices have rebounded more than 80 percent from a 12-year low in February, but they remain well below peaks of more than $100 a barrel reached in June 2014.

 

 

Advanced Markets

 

U.S. industrial production jumped 0.7 percent (m/m) in April, following a 0.9 percent slump in March, beating forecast by economists of 0.3 percent gain. The surge was driven by increased demand for capital goods, utilities, and car manufacturing output, while mining output recorded a decline. Separately, U.S. consumer prices rose 1.1 percent (y/y) in April, higher than the 0.9 percent increase in March, and in line with market expectations. The increase was led by a rise in the costs of energy, rent and medical care. Meanwhile, excluding food and energy, core inflation eased for the second straight month to 2.1 percent from 2.2 percent in March.

 

Euro Area trade surplus widened to €28.6 billion in March, compared to a €19.9 billion surplus in March 2015, beating market expectations of a €22.5 billion surplus. It was the highest reading since July 2015, following a broad-based 3 percent (y/y) decline in exports to €177.8 billion, while imports dropped at a much faster rate of 8 percent to €149.2 billion.

 

Consumer prices in the U.K. rose 0.3 percent (y/y) in April, easing from a 15-month high increase of 0.5 percent in March and lower than the market expectations of a 0.5 percent increase. The deceleration in inflation rate was largely driven by lower energy prices.

 

 

Emerging and Developing Economies

 

 

Europe and Central Asia

 

The Armenian central bank lowered its benchmark refinancing rate by 50 bps to 7.75 percent amid deflationary pressures. In April, consumer prices dropped 1.9 percent (y/y) after the 2.0 percent fall in March, the lowest in 10 years.

 

The central bank of Serbia left its benchmark interest rate on hold at 4.25 percent, as expected. Policymakers said the monetary policy should remain vigilant, despite low inflationary pressures and accelerating economic growth, as uncertainties in commodity prices and global financial markets still persist.

 

The Czech Republic economy advanced 3.1 percent (y/y) in Q1, slowing from a 4 percent expansion in the Q4, but beating market expectations of a 2.5 percent increase. Growth was mainly driven by household consumption and higher investment and external trade. On a quarterly basis, GDP grew 0.5 percent, higher than 0.4 percent in Q4.

 

 

Middle East and North Africa

 

The Tunisian economy rose 1 percent (y/y) in Q1, up from a 0.3 percent increase in Q4. Manufacturing and services output expanded, while non-manufacturing and agriculture declined.  On a quarterly basis, the economy expanded by 0.4 percent.

 

 

Sub-Saharan Africa

 

Industrial production in Senegal dropped 1 percent (y/y) in March, after the 1 percent rise in February, largely due to a sharp drop in textile and leather production. On a monthly basis, industrial production jumped by 9.1 percent. Considering first quarter of 2016, industrial output increased 0.2 percent compared to the corresponding period of 2015.

 

The central bank of Zambia kept its benchmark lending rate steady at 15.5 percent, aiming bring down the double-digit high inflation.