NEWS / Foreign Exchange

Euro-Zone M3 Reaches 24-Year High

- The European indices are currently trading in positive territory in the session after opening up in the red, on speculation of further consolidation after German regulators gave Porsche the OK to proceed with a bid for Volkswagen, and ENI acquired Dominion assets in the Gulf of Mexico for $4.8B.

- European government bonds are trading higher in the session, although in light volume ahead of the May day holiday tomorrow. Similarly, gilts are trading higher in the UK as well following developments elsewhere.

- German retail sales for the month of March were ??“0.7% m/m, below estimates of 0.8%, and 0.5% y/y, above estimates of ??“0.6%. February retail sales were revised down to 1.0% from 1.5% m/m. Despite recent comments made by German officials claiming that the implementation of the VAT hike did not have an effect on the economy, the current retail sales data, and back month revision perhaps suggest a that the three-point tax hike is not yet wearing off, but rather extending its effect on the economy despite the positive trend in recent readings on confidence indicators.

- According to the quarterly manufacturing survey in France, industry demand firmed during the first-quarter and is expected to hold steady during the second-quarter. Despite the rise in the manufacturing survey index to 11 during the first-quarter, from 9 during the fourth-quarter, manufacturers said that industry competitiveness worsened overseas during the first-quarter.

- Euro-Zone M3 rose to its highest level since February of 1983 as a result of a sharp increase in private sector loans. M3 rose to 10.9%; analysts had anticipated that M3 would decline in March, forecasting the March reading at 9.8%. The current reading boosted the 3-Month average for a reading of 10.3%, the highest reading since May of 1983.

- BBA loans for home purchases in the UK rose to 75,098 in during March compared to the prior reading of 54,695. Mortgage lending rose to ??18.6B from the prior reading of ??14.9B.

- In a rather mundane reading of a series of data in the Euro-Zone today, as expected the Euro-Zone CPI estimate remained unchanged in April from March??™s reading of 1.8%. Consumer confidence, which was expected to rise to ??“3, remained unchanged at ??“4 in April. Both industrial confidence, and the business climate indicate were in line with estimates.

- Preliminary Italian CPI for the month of April was in line at 0.2% m/m, while the y/y reading fell slightly below estimates of 1.6% at 1.5%. Harmonized CPI fell shy of estimates of 0.8% m/m and 2.0% y/y at 0.5% m/m and 1.7% y/y.

- April GfK consumer confidence rose to ??“6 from ??“8 in March.

- In a quiet night on the energy front, crude oil futures are currently trading in negative territory, and sit just above the $66 handle at the moment.