"European and Asian equities were pushed in the red by a combination of a U.S. selloff overnight and a dribble of bad news. Japanese services were hit hard by the introduction of a consumption tax, while China’s service sector failed to offset weak manufacturing, according to the latest PMI reports. Australian retail sales were muted and in Europe there were some very disappointing industrial production data from Germany and France. Investors’ moods were hardly lifted by the continuing Ukrainian crisis or by the latest development in Thailand’s political turmoil. In among the rest of the news, it was easy to ignore the morning’s one bright light, Taiwan’s export data".
"GERMANY: March manufacturing orders fell 2.8% on the month against expectations of a 0.2% rise. February’s orders were revised to a rise of 0.9% from an initially reported 0.6% gain.
Germany’s March industry data came as a shock. The weakness was largely down to a collapse in foreign orders, down 4.6%, with euro-zone orders down nearly 10%. In part, that’ll be down to uncertainty over the Ukraine crisis. Japanese and Chinese weakness will have played their part too. Some will be down to the lumpiness of bulk orders, which, based on past performance, could well lead to a big bounce back over the coming months. But even with all these caveats, the data are worrying. (AM)
FRANCE: March industrial production fell 0.7% on the month against expectations of a 0.3% rise following a 0.1% gain in February.
The French economy remains a concern. Domestic demand remains in the doldrums, but there had been hopeful signs of a recovery in industrial output. The latest data question whether even industry is managing to expand. (AM)
ASIA: April HSBC services purchasing managers indexes
–CHINA was 51.4 from 51.9 in March
–JAPAN was 46.4 from 52.2 March
HSBC’s China figure – which comes after the government’s official nonmanufacturing PMI last Saturday rose to 54.8 from 54.5 – suggests that services activity continues to expand but is hardly enough to offset weakness in the far more important manufacturing sector. That adds to the evidence that China’s economy has lost a good bit of momentum since late last year and will be hard-pressed to meet authorities’ 7.5% growth target for the year. In Japan, meanwhile, the plunge in the services PMI is seen as a temporary response to the April 1 rise in the sales tax, mirroring weakness in the manufacturing PMI. Still, despite the downbeat headline number, the survey showed Japanese service providers at their most optimistic since last September, expecting economic conditions to improve over the next 12 months.
THAILAND: Thailand’s constitutional court ordered Prime Minister Yingluck Shinawatra removed from office, saying she abused her power when she demoted the country’s top security officer in 2011. Nine Cabinet members also were ordered removed, while 24 will remain in place, with Deputy Prime Minister and Commerce Minister Niwattumrong Boonsongpaisan appointed as caretaker prime minister for now.
The turmoil has sent one of Southeast Asia’s most promising economies into a tailspin. It’s not clear whether national elections currently set for July will go forward as planned"
Source: WSJ.
