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One Minute Macro Update
U.S.: Markets mixed this morning with the U.S. up and Europe in negative territory as oil prices rose dramatically and Middle Eastern turmoil raged on. Bernanke spoke yesterday in the semi-annual Humphrey Hawkins speech to Congress, continuing to push Congress to tighten fiscally and to not raise the short term debt limit. While expressing concern for inflation risks, he remained confident that the outlook remains stable for the country. Monetary policy is likely not to tighten until unemployment is subverted and inflation stabilizes toward 2%. Bernanke’s presentation to Congress continues today. Data yesterday showed that manufacturing grew at its fastest pace since 2004, as the ISM Manufacturing Index rose to 61.4 in February v 60.8 prior, putting the U.S. in the head of the pack in the recent manufacturing upswing and causing a sell-off in treasuries. While we do not necessarily believe that a rapidly rising ISM will drive GDP growth above 3%, we do believe that Friday’s payrolls numbers will not echo the prior months disappointment and should print close to the consensus forecasts. Today’s ADP, however, is anyone's guess since the tracking error flipped late last year. The Fed’s release of its Beige Book to this afternoon will provide a more narrative outlook on the current economy.
Europe: In its interim forecast, the EC revised up its 2011 GDP estimate for the Euro-zone by 1bp to 1.6% v 2010’s estimated 1.7%. The EC was not shy to note that the growth would not be equal across members, however. Inflation risk had a more significant revision, moving up to 2.2% for the Euro-zone this year from 1.8% originally forecasted last November, heightening due to geopolitical conflict in the Middle East and the global economic recovery. SOXWE pushing back out to 180bp from 175bp yesterday as S&P reaffirmed its negative outlook on both Portugal and Greece. Euro zone PPI rose 1.5% MoM v 1.1%E and 6.1%YoY v 5.7%E. Spanish unemployment grew 68.3K MoM from 130.9K prior. Irish unemployment rose to 13.5% in February v 13.4% prior. Construction rose in the U.K. with the PMI construction index rising to 56.5 v 52.8E.
Asia: An Advisor to the Chinese Finance Minister told reporters to expect the Yuan to appreciate at least 3% and GDP to grow by 10% this year. Japan’s Lower House of Parliament passed PM Kan’s ¥92.4T budget, and will become law within 30 days without the approval of the dissenting Upper House. However, it is unlikely that PM Kan will be able to push a bond authorization through both houses that is needed to fund nearly half of the budget. With the political heat rising, PM Kan’s popularity is falling, making a snap election likely in the near future. Australian GDP for 4Q10 grew 0.7% QoQ v 0.7%E and 2.7% YoY v 2.8%E. South Korean headline inflation rose 0.8% MoM v 0.6%E and 4.5% YoY v 4.3%E.
From Brian Yelvington of Knight Capital
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The venerable Ambrosycolouredlenses Brit-chard finally showed his true colours today with this propaganda piece...
http://www.telegraph.co.uk/finance/economics/8353242/Surging-orders-in-the-US-raise-capacity-worries.html
Pertinent and worth a quick peek at.
ORI
inflation stabilizes toward 2%..........
is that a daily inflation number he's shooting for?
bcause ,at least as far as fuel goes, he's pretty much spot on
we have had 7 cent a day increases here for last five days...just thought i'd put it out there
You'll be scared when it will be 2% MoM. Example: argentina
http://bpp.mit.edu/daily-price-indexes/
ADP +217k. Service jobs +202k
What a load of Horse crap. After loosing ground for several days in the market, and now suddenly CNBC is posting postive job growth just minutes before open? Big surprise there!
also important to keep an eye on Saudi Arabia's all share index, down another 4% on top of yday's 7% sell off: http://www.hedgefundlive.com/blog/adp-employment-number-pulls-in-futures-crude-continues-to-rally
/ES
An experiment to see whether Wolfe Waves can identify support and resistance levels. The three parallel grey lines are a long-term upward channel. Within the channel are two WWs (1-6) and (1'-6') with their respective targets in purple. No promises that this will work but we'll test it.
http://www.zerohedge.com/forum/99er-charts-0