Time For Reality To Catch Up: China, Japan, South Korean, US Data Miss Expectations, Greek Economic Contraction Gets Uglier, Slovenia Cuts Growth Forecast as Bail-out Fears Grow, And 16 Big Bubbles That Are Getting Ready To Burst…
Has Abenomics Stalled Out?
One of the big stories of the last 6 months has been “Abenomics.”
This is the moniker given to the economic regime being imposed by Japan’s new Prime Minister Shinzo Abe, who hopes to revive the country’s weak economy via fiscal stimulus, monetary stimulus, and even structural reforms. You can read a complete guide to it here.
Anyway, in financial markets Abenomics has been greeted enthusiastically.
The Nikkei has been a prime mover. And the belief that the Bank of Japan would finally lower real interest rates significantly was causing the yen to dive (something that exporters have been happy about).
- Japan’s Tankan survey of business conditions for manufacturers rose to -8 in the first quarter from -12 in Q4 2012, but economists had expected an advance to -7. Similarly, the outlook for manufacturers rose to -1 from -10, but fell short of expectations of a +1 index reading. For the services sector, the current conditions index rose to 6 from 4, short of expectations of an 8 reading, while the outlook index rose to 9 from 3, missing expectations of an advance to 11.
- China’s official manufacturing PMI rose to 50.9 from 50.1 last month, short of expectations of a rebound to 51.2 on the index. HSBC‘s China manufacturing PMI rose to 51.6 from 50.4, matching expectations.
- South Korean exports, known as the “economic canary in the coalmine” because of their dependence on China and Japan, rose 0.4 percent in March, well short of the 1.4 percent gain expected by economists. However, South Korea PMI rose to 52.0 in March from 50.9 in February, indicating an accelerating pace of expansion in manufacturing activity.
- Greece PMI tumbled to 42.1 in March from 43.0 in February, indicating an accelerating pace of an already-severe contraction in manufacturing activity there. Tomorrow, we get PMI data for the rest of the euro zone, and economists mostly expect lower or unchanged readings from last month.
US PMI Falls Slightly To 54.6
U.S. PMI has fallen slightly to 54.6.
The previous month was 54.9, and analysts had expected 55.0.
Cyprus Parliament President Says “No Future” Under Troika, Calls For “Iceland” Solution
Just last week Yiannakis Omirou, Cypriot House of Representatives President, was calling for the nation to accept it is “time for responsibility” as they progressed towards a final solution; and yet today, as Cyprus’ Famagusta reports, he believes the ‘Troika-imposed’ responsibility will, “turn Cyprus into a colony of the worst possible type.” His ‘Icelandic’ solution is to “leave the Troika and EMS behind,” to ensure “national independence, national sovereignty, moral integrity, and economic independence.” He may have a point; judging from the chart below of the Troika’s poster-child Greece, relative to Iceland, things are not going so well. As Omirou ominously concludes, “if we remain bound by the Troika and the memorandum Cyprus’ destiny is already foretold and there will be no future.”
“Tragic” Cyprus Contagion To Cripple 1600 Greek Businesses
Slovenia cuts growth forecast as bail-out fears grow
Slovenian GDP is set for a deeper-than-expected 1.9pc contraction this year, compared with an earlier estimate of 1.4pc, according to official forecasts released on Friday.
The expected pace of the nation’s return to growth in 2014 was also slashed to 0.2pc, down from earlier predictions of 0.9pc.
The revised forecast brings government predictions in line with the IMF’s gloomier verdict that that the economy will shrink 2pc this year, the most in the European Union after Greece and Cyprus.
“Along with the worsening economic situation in the international environment, key elements for the decline will be the state’s continued fiscal consolidation and the rebuilding of the banking system,” said Bostjan Vasle, the institute’s director.
16 Big Bubbles That Are Getting Ready To Burst
Corn Prices Are Collapsing
Here’s look at the trading action via FinViz:
LIVE: Thousands Of Companies Around The World Are Revealing The Truth About The Economy
March 28 (All Times EST)
- 7:15 p.m. Japan: Markit/JMMA Manufacturing PMI — 50.4, up from 48.5 in February
March 31, April 1
- 8:00 p.m. South Korea: HSBC Manufacturing PMI — 52.0, up from 50.9
- 9:00 p.m. China: NBS Official PMI—50.6, up from 50.1
- 9:45 p.m. China: HSBC Manufacturing PMI — 51.6, up from 50.4
- 10:00 p.m. Taiwan: HSBC Manufacturing PMI —51.2, up from 50.2
- 10:00 p.m. Vietnam: HSBC Manufacturing PMI — 50.8, up from 48.3
- 11:00 p.m. Indonesia: HSBC Manufacturing PMI — 51.3, up from 50.5
- 1:00 a.m. India: HSBC Manufacturing PMI — 52.0, down from 54.2
- 1:00 a.m. Russia: HSBC Manufacturing PMI — 50.8, down from 52.0
- 3:00 a.m. Turkey: HSBC Manufacturing PMI — 52.3, down from 53.5
- 4:00 a.m. Greece: Markit Manufacturing PMI — 42.1, down from 43.0
- 9:00 a.m. Brazil: HSBC Manufacturing PMI — 51.8, down from 52.5
- 9:00 a.m. US: Markit Manufacturing PMI — 54.6, down from 54.9