Here is the “In the Financial Papers Radio Broadcast” (Length: 4:14minutes). The player should load automatically. Please let me know if you like it. Contact Kathy
In the Financial Papers:
US Retail Sales Increase More than Expected
Japan to Raise Meat Prices as Corn Boosts Feed Costs
ECB Tells Market Rate Hike Likely to be One-Off
The topics at G8
Beige Book Report mixed results
Citigroup Shuts Down Hedge Fund
Floods Threaten Midwest Economy, Corn Prices Hit New Highs
The US dollar has started the week strong thanks to the better than expected leading indicators report. For the second month in a row, leading indicators increased, suggesting that the US economy may not be in a recession. Although the numbers are definitely encouraging, I believe that recession or no recession is just a matter of semantics.
The bigger question is whether or not the current downturn will be shallow.
With the Fed signaling an intention to pause when they meet to discuss monetary policy in June, the market is looking for any data that would confirm that stability is the new course for the US economy. The LEI numbers are certainly encouraging even though we are slightly suspicious of whether the improvements are more than just a rebound. Building permits, stock prices and the interest rate spread were the biggest gainers, but the two former components saw a big decline the prior month.
The US economy is still at risk for slower growth, but that should not draw away from the fact that the market perceives the news as dollar bullish. This strength should continue into tomorrow’s producer price report. Not only have food and oil prices increased last month, but the import price report also surprised to the upside.
The dollar should remain firm in the beginning week as there is nothing to threaten its rise until Friday when we are expecting the existing home sales report. Traders still need to be cautious of what they buy because even though I believe that the dollar should strengthen against the Euro this week it could continue to sell off against the Canadian dollar (I am looking for both the German ZEW and IFO survey to fall short of expectations and Canadian CPI to beat expectations).
Here is the “In the Financial Papers Radio Broadcast” (Length: 5:43minutes). The player should load automatically. Please let me know if you like it. Contact Kathy
In the Financial Papers:
New Zealand Dollar, One of the Weakest Pairs in the FX Market
Eurozone GDP Numbers
Factories Won’t Save the Day
Manufacturing in NY Unexpectedly Contracts
Industrial Production Weakens
US Consumer Prices
High Soybean Prices Hurt Japanese Tofu Makers
Commodity Prices Retreating, Rice Falls to Daily Limit AGAIN
Early Markdowns Mean Springtime for Shoppers
Iceland Debates Switching to Euro.
I am a big believer that the next big shock to the global economy is not the weakness of the US economy, but skyrocketing food prices.
My good friend Shirley is a relief worker for Trocaire out of Mozambique, Africa and through her, poverty and hunger is an issue particularly dear to my heart.
When she tells me that rising food prices are hitting developing / under-developed nations, I know how serious of a problem its become:
Soaring food prices
Rising food prices all over the world are hitting the poor hardest. The rapid increase in the price of staple foods – an increase of 83% in the past three years – is due to increased demand, the increased use of land to grow crops for biofuels rather than food, and poor weather (in large part caused by climate change). Hundreds of thousands of people from Haiti to Egypt to Afghanistan are at greater risk of hunger, and riots have broken out in several countries. A few months ago, Mozambicans, who are usually peaceful, took to the streets to protest the rise in transport and food prices.
In Haiti > Hungry mob attacks Haiti palace
Crowds of demonstrators in Haiti have tried to storm the presidential palace in the capital Port-au-Prince as protests continue over food prices. The demonstrators outside the presidential palace said the rising cost of living in Haiti meant they were struggling to feed themselves. “We are hungry,” they shouted before attempting to smash open the palace gates.
In recent months, it has become common among Haiti’s poor to use the expression “grangou klowox” or “eating bleach”, to describe the daily hunger pains people face, because of the burning feeling in their stomachs.