"Sometimes real-world tension and threats to the global economy are big enough that they can overwhelm even the most soothing messages from central banks for markets. After mostly ignoring the crisis in Ukraine, European equity markets are starting to pay attention. That is evident in the fact that Wednesday’s rally on Wall Street – itself a positive response to investor-friendly words from Fed Chairwoman Janet Yellen – has failed to lift the spirits of European investors. They are instead focused on a clear ratcheting up of the tensions in Ukraine by Russian President Vladimir Putin. Disappointing corporate results haven’t helped either, especially those of firms with significant exposure to China and other developing economies".
"UKRAINE: Russian President Vladimir Putin ratcheted up tensions with Ukraine by arguing that the country’s eastern and southern regions were historically part of Russia and insisting that Russian speakers in the country needed “guarantees” their rights will be respected.
Russia’s plans for Ukraine become clearer by the day. Vladimir Putin has a proprietary interest in the country’s ethnic-Russian regions and has shown every intention of carving them off and absorbing them into Russia. That Ukraine is substantially poorer than Russia per capita makes such moves not only attractive for its Russian speakers, but also leaves Ukraine ill-equipped to fight off Russian advances. With the west declining to make much of a stand against Russia, its annexation of these Ukrainian regions becomes more a matter of when rather than if".
"GERMANY: March producer prices fell 0.3% on the month and were down 0.9% on the year against forecasts of no change on the month and down 0.7% on the year.
German producer prices undershot expectations in March, suggesting further downward pressure on consumer prices in the coming months. But with falling energy prices a major component of the decline, this should be good for German consumers who will have more money left for discretionary spending".
U.K.: March Council of Mortgage Lenders gross mortgage lending was GBP15.4 billion against GBP14.8 billion in February.
"Having been in the doldrums since the financial crisis, mortgage lending is picking up in the U.K. with the surge in house prices. Lending rates in March were up a third on those a year earlier. So far, overall borrowing levels across the economy are low, though signs are that those taking out loans are taking ever larger ones – in London the average first time buyer borrows 3.7 times salary, against a pre-boom average of around 3 times. The question now is how long before the Bank of England starts to worry about overheating in the real-estate lending market".
JAPAN: "The Japanese government downgraded its assessment of the economy for the first time in 17 months, as consumers tighten their belts after an increase in the country’s sales tax. The monthly report said the economy is on a “moderate recovery trend,” but noted “some weak movements.” The government also said Thursday that consumer sentiment worsened in March from February – even before the sales tax rise took effect April 1.
Also Thursday, the Bank of Japan raised its assessment of one of the country’s nine regions in its monthly “Pink Report,” but left its assessment of the others unchanged. Overall, early returns suggest the the economy didn’t suffer any massive blow from the sales tax increase, but much of the momentum of Abenomics appears to have been lost. BOJ Gov. Haruhiko Kuroda said Thursday that he’s prepared to ease monetary policy further if necessary, and it’s likely that he will have to down the line".
