NEW$ & VIEW$ (5 April 2012)

Storm cloud   THE EURO SPRING IS HERE. AINT’ SUNNY!  Storm cloud

 

Borrowing Costs Soar for Spain

Spain found itself in the market’s cross hairs as mounting concerns over the economy sparked a sharp slide in the country’s bonds, erasing the effect of the ECB’s cash injection

The rout in Spanish bonds weighed heavily on financial markets, with the euro coming under pressure, stocks falling and Italian bond yields rising sharply.

FRENCH ELECTIONS

According to an opinion poll released Wednesday, President Nicolas Sarkozy would lead the Socialist Party’s François Hollande in the first round of the election to be held April 22, though he would lose in the event of a runoff.(WSJ)

Confused smile   ECB Chief Stresses Euro-Zone Inflation Risk

The European Central Bank said it is concerned about too-high inflation in the euro zone this year, disappointing hopes it might signal a willingness to help boost the region’s meager growth.

“We will pay particular attention to any signs of pass-through from higher energy prices to wages, profits and general price-setting,” Mr. Draghi said after the ECB’s monthly meeting. Public-sector workers in Germany, Europe’s biggest economy, last week secured a 6.3% pay increase spread over two years, raising concerns among some analysts that higher oil prices could stoke further price increases in other parts of the economy.

Despite the bleak data, Mr. Draghi said he sees signs of “stabilization” and expects the economy to “recover gradually” this year thanks in part to strong demand overseas.

I don’t know where he sees signs of stabilization. From Markit PMI for Europe:

Service sector business activity fell for the second month running in March, while manufacturing output contracted for the first time in three months. Inflows of new orders fell for the eighth month running, dropping at the fastest pace so far this year.

Sounds more like acceleration to me. Draghi actually wants to stabilize German inflation angst. Draghi resists calls for ‘exit strategy’  ECB chief seeks to head off German inflation fears

 

Sad smile   Monti softens labour proposals
Italian PM offers concessions in face of union opposition

The revised plan set out by Mr Monti demonstrates the unelected government’s readiness to face down the threat of social unrest from some unions, but also his recognition that he cannot risk losing the support of Pier Luigi Bersani, leader of the Democrats, in parliament.

THE U.S. REMAINS NICE AND SUNNY

Smile   ADP: US private sector adds 209,000 jobs  March figures show labour market recovery

 

[OFFICE]Office Vacancies Decline

The national vacancy rate in the office market fell slightly to 17.2% at the end of March, from 17.3% in the fourth quarter of 2011, according to real-estate research service Reis, Inc.

Asking office rents in the first quarter ticked up 0.5% to $28.10 per square foot annually, according to Reis. Rents hit a postrecession low of $27.50 in the third quarter of 2010 and a prerecession record high of $29.37 in the third quarter of 2008.

 

EARNINGS WATCH

Costco misses, Limited tops March sales estimates

Comparable sales at Limited Brands, a perennial winner, rose 8 percent, trouncing the analysts’ average estimate of 4.4 percent growth, according to Thomson Reuters data.

Three of the retailers that had posted sales by early Thursday morning beat expectations, while four missed, the data showed.

Last month was the warmest March in more than 50 years, according to weather tracker Planalaytics. As in February, the weather helped clothing retailers bounce back from December and January, when they had to take sharp discounts after stocking up on merchandise for a winter that never came.

However, Costco reported a 6 percent rise in March same-store sales that missed market expectations. The retailer, the biggest to post monthly results, suffered from weak foreign currencies compared with the U.S. dollar.

TOTAL DEGREE DAYS-U.S.

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  • Target same-store sales: +7.3% beats consensus of +5.4%.

 
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