Interest Rates
Benchmark Bond Yields
The Treasury on Tuesday accepted €1.50 million in 91-day Treasury Bills at an average yield of 0.732% and €4 million in 182-day Treasury Bills at an average yield of 0.781%. Outstanding Treasury Bills amount to €274,499,000 – a decrease of €8.70 million from the previous week.
In the US employers added a more-than-expected 236,000 workers during February while the unemployment rate fell to a four year low. The rise in jobs far exceeded expectations of a rise of 150,000, which figure was also considerably higher than the gain of 119,000 during January. Jobs were created across a wide range of sectors with the construction industry adding 47,000 jobs, the biggest increase since March 2007. The unemployment rate fell from 7.90% to 7.70%, the lowest since December 2008.
The rate of inflation in China hit a 10-month high in February mainly due to higher food prices and increased consumer spending during the Lunar New Year festivities. Consumer prices rose 3.2% from a year ago, with food prices up by 6%. Price increases are a concern as these may prompt Chinese policy makers to tighten monetary policies, which in turn may effect growth. China’s industrial output had the weakest start to a year since 2009 adding to signs of an uneven recovery in the world’s second largest economy. Industrial production in the first two months of the year rose by an annual rate of 9.9%, compared to market expectations of 10.5%. Meanwhile, the volume of retail sales for January and February were also below expectations with annual growth of 12.3%.
France, the eurozone’s second largest economy, had a weak start to the year as industrial production points towards a deepening contraction. Output from French factories, mines and utilities fell by 1.20% in January compared with the previous month. This decline was partly offset by a revised reading of +0.90% for December, up from the previous reading of -0.10% month-on-month. On the other hand, Germany’s trade surplus narrowed in January following a surge in imports suggesting domestic demand in the country is set to bounce back. Imports surged by 3.30 percent, the fastest pace of growth since May last year, while exports were up by 1.40% , mostly driven by robust demand from China and the US. Germany’s economy shrank 0.60% in the last three months of 2012, thanks to recession in its main euro zone export markets and tepid domestic confidence.
Manufacturing output in the UK fell in January at its fastest pace since June and adding to fears the country will dip back into recession. Output fell by 1.50% , following a 0.90% rise in December and adding to fears the UK will dip back into recession. The drop in output wiped out gains registered in December and caused sterling to fall against both the US dollar and the euro.