Seasonally Adjusted For April
Provided by: Australian Industry Group (AIG)
Official Release: PDF

The services sector in Australia saw a rather sharp decline for April, falling 7.6 points into contraction territory. Sales and New Orders were down considerably, while employment and wages eased. Input prices, a measure of inflation, rose from 70.5 to 73.5. The Aussie rose vs the US Dollar overnight as traders focused more on inflation data that came out contemporaneously which showed inflation growing above expectations.

Highlights from the Release:

"■ Growth in services sector activity stalled in April; with rising interest rates and high fuel costs further restraining consumer and business demand.
■ While four of the nine services sectors reported growth in April, activity fell sharply in retail trade; finance & insurance; and transport & storage, leading to a decline in overall services activity.
■ The seasonally adjusted Australian Industry Group/ Commonwealth Bank Performance of Services Index (Australian PSI®) fell 7.6 points to 47.3, below the key 50.0 level separating expansion from contraction.
■ The deterioration in activity was underpinned by a decline in sales, new orders, and supplier deliveries. Employment lifted marginally in April, while the rate of stock accumulation rose."

For 1st Quarter
Provided by: Australian Bureau of Statistics

HPI y/y: 13.8%, forecast 11.0%, pr. 13.8% (rev from 12.3%)

Housing prices in Australia rose 13.8% in annual terms. The data shows that prices in Australia's housing market broke the trend seen in other parts of the world. The gains come also despite interest rates that are at a 12-year high. The cities of Melbourne, Brisbane and Adelaide rose by more than 20% compared to last year. Looking at the 1st quarter of 2008 compared to the 4th quarter, prices rose 1.1%, a decline from the pace set in the 4th quarter. It was still however, higher than expectations of flat growth.   

Press Conference following Bank of International Settlements bi-monthly meeting
Provided by: BIS

In a press conference following the meeting in Basel, Switzerland, Trichet pointing to ongoing growth in teh EUro-zone, but warned about inflation risks. He pointed to the rise in commodity prices which as a global phenomenon has affected all the industrial nations. Commodity prices are being pushed up by hungry demand from emerging economies such as Russia, China and India. Food prices are also up at astronomical levels, almost doubling in the last year. 

For March
Provided by (Latest Release): Australian Bureau of Statistics
Impact: High

Imports m/m: 1.3%, pr. -0.2% (Feb), 5.4% (Jan), 0.4% (Dec)
Exports m/m: 4.4%, pr. -4.1% (Feb), 1.7% (Jan), 1.8% (Dec)

Australia's trade balance improved by 16% in March, as exports increased 4.4% (A$19,176M) compared to February's -4.1% change. Imports were up as well, but by a lower amount, climbing 1.3% (A$21,912M). Exports were led by an increase in iron ore, coal and wheat. Australia's economy continued to be bolstered by demand for Australian goods. With wheat prices surging, and good rainfall, the country is set double its wheat production. Demand for Australia's raw materials has been fueled by the rapid growth in China. Australian officials may be expecting the trade deficit to continue shrinking as imports may be set to coll as a result of tighter consumers - faced with 12-year high borrowing costs.

Provided by: Reserve Bank of Australia
Official Release: Statement

The Reserve Bank of Australia held rates steady at 7.25%, saying that growth in aggregate demand will subside as spending and demand for credit weakens. On the plus side to growth, the trade balance is projected to improve and boost national incomes. The bank is betting that even though inflation will remain high in the short term, it will cool as the economy slows.

The news was dovish, coming on the heels of higher than expected inflation data, and caused the Aussie to slip in the 20 minutes following the release.

From the Release:

"Inflation in Australia has been high over the past year, with the CPI rising by a little over 4 per cent and underlying measures at a similar pace. Price rises were widespread, in an environment of limited capacity and earlier strong growth in demand.

In order to reduce inflation over time, growth in aggregate demand needs to be significantly slower than it was in 2007. Evidence is accumulating that this is occurring. Indicators of household spending have recorded subdued outcomes over recent months, and demand for credit by both households and businesses has weakened.

As a result of the Board’s earlier decisions, additional rises in market interest rates and tougher credit standards for some borrowers, there has been a substantial tightening in financial conditions since the middle of last year. Conditions in international financial markets, though improved in recent weeks, also remain difficult. These factors are acting to restrain demand."

Final Version for April

The final version of German Services PMI saw the index climb .3 points from its preliminary release from April 23rd. It the fastest pace in 7 months, following March's 51.8 and February's 52.2. Services seem to have recovered well from January's dip into negative territory at 49.2. It will be important for the Euro-zone whether Germany continues to be able to grow during an environment of tight credit conditions which is currently slowing other economies like the US, UK, and Canada. For example, today's UK Services PMI revealed a sharp fall in April.

Capsule comment from April 23rd: "Germany private-sector economic activity in April posted its strongest expansion in seven months. The composite index, which combines manufacturing and services rose to 55.0 from 53.0 in March. The euro zone's largest economy seems to be weathering the global credit crunch and the appreciation of the euro. Growth in German services led the way as the PMI increased to 54.6 in April from March's 51.8. The consensus among economists was for the services PMI to decline.

Manufacturing reported the weakest level of activity so far this year, which may imply that the higher euro may be affecting German exports, weakening demand for new orders. "

For April
Provided by: Chartered Institute of Purchasing and Supply

Growth in the UK services sector slowed to the weakest pace in five years in April. The Services PMI indicator slipped 1.7 points to 50.4, much lower than expected by economists. The decline comes as a result of more restrictive access to credit for both households and businesses. The economy is facing some stiff headwinds as a result of a housing slump. Falling housing prices are curbing domestic demand. The Bank of England, worried about inflation, cannot cut rates at the same pace as the US did, with rates currently at 5% after 3 rate cuts since December. The BoE meets this week, and is expected to hold rates steady to combat inflation.

The Pound weakened vs the Dollar following the release hitting an intra-day low at 1.9634 around 5Am EST, but then recovered. and was weaker against the Euro heading into NY trading.

The Canadian housing market has been cooling, as permits have been steadily dropping. Building permits indicate buying intentions that that raise demand and translates to building intentions.

Approvals for the residential sector decreased 5.7% to $3.6million. A 4.6% increase in multi-family home approvals was overwhelmed by a 8.5% decrease in sing-family homes. This is consistent with a 5-year trend of the demand shift towards the less expensive multi-family dwellings.

Non-residential building permits also declined, though at a slower rate of 2.4%. Comericial property permits increased 5.3%, whereas industrial permits plunged 21.9%. Institutional component also fell 4.7%.

From the release:

Construction intentions in Canada continued to cool. As a result of a marked decline in Alberta, the total value of building permits in Canada dropped 4.5% in March to $5.6 billion. This was the fourth decrease in five months. Both residential and non-residential sectors declined in March.

For April
Provided by: Nationwide
Official Release: PDF

Current Conditions: 65, pr. 74
Expectations Index: 74, pr. 79
Spending Index: 65, pr. 67

The Nationwide Consumer Confidence Index surprised on the downside, falling 7 points to 70 in April. It's the lowest figure since polling began in May 2004. Nationwide said that consumer sentiment may see further declines in the month to come. The primary concern are rising food and fuel prices, as well as whats turning into a serious housing slump. The Bank of England has lowered rates three times since December, but consumer don't feel like those cuts are being passed on by lenders. Also, loans for mortgages are getting harder to acquire with credit costs rising for banks. All the sub indexes fell, with consumers saying they were less wiling to spend on household goods and major purchases.

From the Release:

"Fionnuala Earley, Nationwide’s chief economist: The cut in interest rates in April did little to lift consumer spirits. Food and fuel prices remain high and, with house prices no longer rising, it is unlikely that consumer confidence will pick up very quickly. We may have to accept that confidence levels could well worsen before they get better. This is especially true as inflationary pressures mean the MPC will probably prefer to cut rates at a more gradual pace than many would prefer."

For March
Provided by: Office of National Statistics (ONS)

UK's industrial output levels fell 0.5% in March compared to February, dragged down declines in by electricity, gas and water production. Manufacturing, the key component also declined 0.5%. The market reacted to the release and put pressure on the pound. Data on production has been mixed this year, without a clear trend. The growth in output has definitely slowed, and can be expected to continue slowing because of global easing in demand. The latest 2 reports on Manufacturing PMIs for April and March have beat expectations and remains above the boom-bust level. Therefore the decline in industrial production shouldn't have much priority for the Bank of England's decision tomorrow. Inflation and the nation' housing slowdown are the forefront its concerns.

From the release:

Between February and March, manufacturing output decreased by 0.5 per cent. The fall in March was widespread with output decreasing in 10 of the 13 sub-sectors, increasing in two sub-sectors and one sub-sector remained unchanged. The only significant decrease was in the transport equipment industries, where output fell by 1.3 per cent during the month. Within transport equipment output of the motor vehicle production industry has fallen by 2.7 per cent, returning to more normal levels after a strong February. During February many car manufacturers increased production of new models prior to their launch. Within manufacturing, there were no significant increases in the month.

For March
Provided by: Eurostat
Official Release: PDF

Retail Sales y/y: -1.6%, forecast -0.6%, pr. 1.0% (rev from -0.2% - Feb)

European retail sales declined 0.4% from the prior month and were down 1.6% compared to March of last year. That is the poorest annual reading since this series began being recorded in 1995. Consumers curbed their spending as high prices for food and fuel ate into their purchasing power. The data will be jolt to the ECB which has focused on combating inflation while insisting that economic growth was still strong. If consumer spending continues to show results like these it will be hard pressed to ignore calls of moving on interest rates.

The Euro weakened vs the Dollar overnight, with its losses accelerating following the release.

From the Release:

"In March 2008, compared with February 2008, the volume of retail trade1 fell by 0.4% in the euro area2 (EA15) and by 0.7% in the EU272. In February3 retail trade fell by 0.2% and rose by 0.6% respectively. In March 20084, compared with March 2007, the retail sales index fell by 1.6% in the euro area, but rose by 0.4% in the EU27.

Monthly changes: In March 2008, compared with February 2008, “food, drinks and tobacco” decreased by 0.1% in the euro area and by 0.6% in the EU27. The non food sector fell by 0.6% and 0.8% respectively.

Annual changes: In March 2008, compared to March 2007, retail trade of “food, drinks and tobacco” fell by 2.7% in the euro area and by 1.0% in the EU27. The non food sector decreased by 0.9% and grew by 1.4% respectively."

For March (s.a.)
Provided by: The Ministry of Economics and Technology

Factory Orders y/y: -5.0%, forecast 5.7%, pr. 9.0% (Feb), 8.9% (Jan)

German factory orders declined for a fourth month in March, dropping 0.6% on the month. Expectations had been for a slight rise. The annual figure for orders fell 5%, the first negative reading since March 2005. Orders for investment goods such as machines fell 2.3% on the month, and 4.1% on the year, while demand for consumer goods declined 2.7% for the month and 10% on the year. Exports are still expected to hold as Asian economies bolster orders.

Domestic demand is faltering as a result of inflation while foreign demand slacks because of a high euro. This factors are affecting all of Europe, as the retail sales data from the euro-zone showed today, adding pressure on the ECB as it tries to strike a hawkish stance on inflation. The global downturn that has claimed slower growth in other countries like the US, UK, and Canada is showing its signs in Germany, slowing the euro-zone's momentum.

Preliminary Version for 1st Quarter
Provided by: Department of Labor

Labor Costs q/q: 2.2%, forecast 2.6%, pr. 2.8% (rev from 2.6%)

US worker productivity climbed 2.2% in the first quarter, higher than expectations. Productivity has gone up as companies try and get more productivity out of their current workers, and trim staff hours by the most in 5 years (-1.8%). Firms are responding to weaker sales and higher raw materials costs and an economy that is seeing negative job growth during 2008 (the economy is down 260,000 according to payroll data).

A loose labor market and higher productivity can work to keep wage inflation down. Labor measured 2.2% for the 1st quarter, slowing from the upwardly revised 2.8% seen in the 4th quarter. Costs were lower than the forecast of a 2.6% increase, which should also work to limit inflation. Adjusted for inflation, hourly pay decreased 0.7% in the year ended in March, which is the weakest performance in 13 years.

For 1st Quarter
Provided by: Statistics New Zealand
Official Release: Official Release (.pdf)

Employment Change q/q: -1.3%, forecast =0.1%, pr 0.9% (rev from 1.1)

The New Zealand Dollar weakened after the unemployment rate and employment change came in lower than forecast.

Highlights from the Release:

"In the March 2008 quarter:

• Seasonally adjusted employment decreased by 29,000 to 2,141,000.
• The seasonally adjusted unemployment rate increased to 3.6 percent.
• The seasonally adjusted labour force participation rate decreased to 67.7 percent.
• Seasonally adjusted total actual hours worked per week decreased 1.9 percent. "
  

For the 18th consecutive month, the Australian workforce added jobs to the economy. For April, the 25,400 employment growth exceeded expectations by more than twice the forecasted 10,000. The unemployment rate increased 0.1% to 4.2%, but is not surprising as the participation rate increased 0.2% to 65.4% The pleasant surprise gave the Australian dollar a boost from declining during the Wednesday session.