U.S. Treasuries retreated for the first time in 6 days as upbeat housing data in March and prospect of further scale-back in Fed’s stimulus damped demand for safe-haven debt. Benchmark 10-year yields climbed 4 basis points (bps) to 2.70% in morning trade, the first increase in a week, while the 30-year bond yields rose to 3.48% after reaching a 9-month low of 3.42% last Friday. The current 10-year yield is more than 100 bps higher from a record low of 1.379% reached in July 2012, but is still standing below its decade average of 3.45%.
Chinese stocks lost the most in seven weeks amid reports of weak corporate earnings and growing concerns over the new IPOs. The benchmark Shanghai Composite Index slid for a fourth day, losing 1.6% at the closing, which is the biggest single-day drop since March 10. The Shanghai stock gauge tumbled 2.9% last week, its biggest weekly slid since the week ending January 10 as manufacturing gauge pointed to slowing economic growth and concerns grew a new round of IPOs may drain market liquidity.
High Income Economies
Rebounding from a severe winter, U.S. pending home sales index surged up 3.4% to 97.4 in March after edging down by 0.5% to a revised 94.2 in February. A pending home sale is one in which a contract was signed but not yet closed. With the larger-than-expected increase, the index rose for the first time in nine months, although it was still down by 7.9% (y/y) compared to March 2013.
The composite leading index for Taiwan, China rose 0.22% (m/m) to 104.49 in March, after climbing 0.24% in February. The coincident index also rose modestly by 0.08% from February, while the lagging index declined at a slower pace of 0.15% in March, after a 0.24% fall in February.
Europe and Central Asia
Turkey’s consumer confidence index rose for the second consecutive month to a two-year high 78.5 in April, up from 72.7 in March, but remained below the score of 100 which indicates a negative outlook. Contributing to the improvement in the overall index, the general economic situation expectation index, which pertains to the upcoming 12 months, rose to 107 from 95.9 in March; and the household financial expectation index, which provides a measure of household financial outlook, rose to 94.9 from 91.4; while the unemployment expectation index rose to 85.4 from 79.4 in March.
Latin America and the Caribbean
Mexico’s monthly trade balance posted a surplus of US$1.03bn in March, up from US$0.97bn in February. However, Mexico's trade surplus narrowed 41.4% in March compared with the previous year as imports accelerated. Year-on-year, exports grew 4.5% spurred by non-oil sales, which increased 6.9% (y/y), while oil shipments fell 11.1% (y/y). Meanwhile imports rose 7.2% (y/y), driven by a 9.1% (y/y) surge in non-oil purchases. In the three months ended in March, exports rose 2.9% (y/y) while imports increased 3.0% (y/y), resulting in a 16.7% (y/y) increase in the trade deficit.