Financial Markets…Global stocks fell for a fourth day and copper price touched its lowest level since 2010 as growing concern over China’s economic slowdown, along with lingering conflicts in Ukraine, damped investor sentiment. The benchmark MSCI world stock index fell 0.6%, heading for its longest losing streak since mid-December. European and developing-country shares slid to a one-month low, and Japan’s Nikkei index tumbled 2.6%. Shanghai copper futures declined by their 5% daily limit to the lowest levels since July 2009. Copper’s drop follows China’s first onshore bond default which has prompted concerns about a possible crumbling of the many loan deals which have used the metal as collateral.
U.S. Treasuries and Japanese yen advanced for a third day as growing risk aversion boosted demand for safe-haven assets. The yield on the benchmark 10-year bond fell as much as 6 basis points to 2.75%, the most since March 3, as the U.S. Treasury is scheduled to auction $21 billion of 10-year notes today. The yen strengthened 0.3% against the dollar to 102.72, after gaining 0.2% yesterday, while Japanese currency was little changed versus the euro at 142.66.
High Income Economies…U.S. wholesale inventories rose 0.6% (m/m sa) in January, following an upwardly revised 0.4% increase in December. The larger than expected increase was partly due to a rebound in inventories of non-durable goods, which rose by 0.8% after falling 0.9% in December. Similarly, inventories of durable goods increased by 0.4% after jumping by 1.2% in December. On a three-monthly annualized basis, inventories grew 8.3% (3m/3m saar) in January after increasing 10.1% in December.
At the same time, U.S. wholesale sales fell 1.9% (m/m sa) in January after edging up by 0.1% in December. The drop was partly due to a 3.2% decrease in sales of non-durable goods, which was led by the plummeting sales of petroleum and petroleum products, and to a lesser extent, sales of paper and paper products. Meanwhile, sales of durable goods also dropped 0.4% in January. On a three-monthly annualized basis, sales grew 6.1% (3m/3m saar) in January after increasing 10.5% in December.
Falling more than expected and for the second consecutive month, Eurozone industrial production fell 0.2% (m/m sa) in January, after falling a revised 0.4% in December. The decline was largely due to a contraction in energy output, which fell 2.5%, while durable consumer goods slipped 0.6%, and production of intermediate goods slipped 0.1%. Partially offsetting these declines, capital goods gained 0.9% and non-durable consumer goods rose 0.4%. On a three-monthly annualized basis, IP grew 3.2% (3m/3m saar) in January after increasing 1.8% in December.
South Korea’s unemployment rate increased from 3.2% in January to 3.9% in February, the highest since March 2011. On an unadjusted basis, jobless persons numbered at 1.2 million at the end of February, an increase of 19.1% (y/y). At the same time, the number of employed persons increased 3.5% to 24.8 million, and the labor force participation rate advanced to 61.4%.
Developing Economies…East Asia and Pacific: At its decision meeting of March 12th 2014, Thailand’s central bank decided to cut the policy rate by 25 basis points from 2.25% to 2.0%, noting that downside risks to growth, driven by prolonged political uncertainties have increased. The policy rate now stands at its lowest level since December 2010.
Latin America and the Caribbean: Brazil’s annual headline inflation, measured by the consumer price index, rose in February, edging up to 5.7% (y/y) from 5.6% in January, slightly exceeding the consensus forecast, due to higher food prices. Month-on-month, prices rose 0.7% in February, up from 0.6% in January.
South Asia: India’s industrial production rose in January, edging up 0.1% (y/y) after contracting 0.16% in December, beating economists’ forecast of continued decline. Contributing to the January outturn, electricity output increased 6.5% (y/y), mining sector output rose 0.7% (y/y), while manufacturing output declined 0.7% (y/y) improving moderately from a 1.2% (y/y) decrease in December.
Meanwhile, India’s annual consumer price inflation slowed from 8.8% in January to 8.1% (y/y) in February, a 25-month low, as food prices decelerated.