South Korea Posts $6.65 Billion Surplus in March

The goods account surplus was 6.98 billon dollars, an increase of 3.87 billion dollars from February’s 3.11 billion dollars. The annual rate of decrease of imports accelerated, while that of exports narrowed compared to the previous month.

The services account deficit stood at 0.65 billion dollars, up from 0.53 billion dollars a month earlier. Among the component account the travel account surplus narrowed, the data showed, while the other service account deficit widened as did transport account surplus.

The income account shifted to a deficit of 0.22 billion dollars from a surplus of 0.48 billion, due to seasonal factors including external dividend payments by corporations whose fiscal year ends in December.

The current transfers account continued to show a surplus, the bank said, standing at 0.53 billion dollars versus the previous month’s 0.50 billion dollars. The current account registered a surplus of 8.58 billion dollars during the January to March period.

The capital and financial account in March registered a net outflow of 2.18 billion dollars, down from February’s 2.98 billion dollars.

The direct investment account showed a net outflow of 0.59 billion dollars, up slightly from February’s 0.55 billion dollars as inward foreign direct investment shifted to a net outflow even though outward foreign direct investment decreased significantly, the bank said.

The portfolio investment account shifted from the previous month’s net inflow of 0.16 billion dollars to a net outflow of 1.49 billion dollars. The net outflow of foreigners’ South Korean bond investment increased significantly due to a net redemption at maturity of bonds issued overseas, whereas Korean residents’ overseas portfolio investment turned to a net outflow. Foreign investors changed to a net domestic stock purchase position.

The financial derivatives account registered a net outflow of 2.32 billion dollars, the data showed, holding steady from the previous month.

The other investment account shifted from February’s net outflow of 0.61 billion dollars to a net inflow of 1.99 billion dollars due to a significant decrease of domestic banks’ overseas deposit assets. The capital and financial account recorded a net outflow of 0.01 billion dollars during the January to March period, the bank said. Reserve assets in March increased by 3.27 billion dollars.

Taiwan Industrial Production Drops Further In March

During the month, manufacturing output dropped 26.78%, while mining and quarrying output was down 9.62%. Electricity and gas supply production fell 9.5%, while water supply declined 3.33%.

Asia-Pacific Market Recap: Nikkei Hits Three-Month High

Positive sentiment is evident in early trading on Monday with Japanese stocks reaching a three-month high and safe havens, like sovereign fixed income and gold, are selling off.

The Japanese Nikkei was most recently trading up 200.10 points to 8949.93 — the highest since early January. Sydney’s S&P ASX 200 was most recently up 13.00 points to 3748.6. Chinese stocks are leading the way in percentage terms with the Hang Seng was up 586.28 points, or 3.9%, to 15131.97.

Yields on 10-year Australian notes are up 12.2 bps to 4.55% while Japanese 10-year futures fell below 137 to their lowest in five months. On the spot market, 10-year Japanese government yields are up 2.0 bps to 1.45%.

Gold has fallen to its lowest level since Jan. 29 after reports showed a fall in etf holdings. Most recently, spot gold was trading down $15.70 to $877.40 per troy ounce.

Yields on three-year Australian notes were up 3.4 bps to 3.97 and the Australian 90-day September 09 contract was up 7.0 ticks to 97.33. The Euroyen September 09 contract was flat at 99.46.

The Australian dollar was up 0.39 cents to 0.7192 against the USD while the New Zealand dollar is up 0.0082 to 0.5940.

Against the yen, the U.S. dollar was most recently up 0.48 points to 100.79. Meanwhile, the euro was up 0.86 cents to 1.3570 USD.

Euro Zone Producer Prices Fall at Speeds Unseen Since 1999

Eurostat reported that euro zone producer price fell 1.8% in the 12 months to February, outdoing both the 1.5% decline expected and January’s 0.7% contraction. Meanwhile, January’s figure was revised down from an initial estimate of -0.5%. February’s annualized fall is the most pronounced recorded since April 1999.

Energy price decline led the way in PPI falls, contracting 4.5% year-over-year, followed by intermediate goods prices, which slipped 3.0%. Conversely, both capital goods and durable consumer goods costs rose in the year at 1.8% and 2.0% respectively.

Between January and February, producer prices fell 0.5% as expected following the previous month’s 1.1% decrease, revised down from -0.8%.

The strongest decline was noted in intermediate goods, the price for which fell 0.9% between January and February. Energy prices slipped 0.7% over the same period, while non-durable consumer goods contracted 0.3%.

Apr 2009 The Week Ahead Europe: BOE Interest Rate Decision

Neil Mellor, a currency strategist at the Bank of New York Mellon, said this will be an interesting meeting because the central bank is running out of options.

“At this point you have to question just how much they can realistically do,” he said. “I think they will tinker with the announcement but I think that is it. There is also a real risk that the bank will sit back and say they want to see if any of the steps taken will have an impact on the economy,” he said.

In the euro zone, market participants will be looking at data relevant to first-quarter economic growth.

IDEAglobal economist Lorenzo Cella will look to euro zone February retail sales figures for confirmation that weak consumption growth will “detract” from GDP in the first quarter of this year.

Economists expect retail sales in the EU to have fallen 0.4% in the month, following January’s 0.1% rise. Year-over-year, expectations are for sales levels to have declined 2.5%, following January’s -2.2% print.

“Given the weak figure we got from manufacturing goods consumption in France and the disappointing figure from Germany, I think that [sales] could be below consensus, around -0.6% [month-over-month],” Cella said.

“This might not have a lot of market implication, but it will definitely have some implication in terms of growth for Q1 2009,” he added.

Economists at Helaba will focus their attention on German industrial production, as well as factory orders for February. The factory orders report from the Federal Ministry of Economics and Technology is scheduled for Wednesday, while the industrial production report, also from the Economics Ministry, will be released on Thursday.

“We expect further declines, but not as much as we have seen in January,” Helaba’s Ralf Umlauf said, referring to production and new orders.

Currently, expectations are for factory orders to have fallen 2.1% in February, following the previous month’s stronger-than-expected decline of 8.0%. On an annualized basis, the consensus forecast is for orders to contract 36.5%, following January’s 37.9% decline.

Industrial production is also forecast to decline further due to falling demand. The median consensus forecast is for a 3.0% contraction in February, following January’s record 7.5% fall. Year-over-year, industrial production is expected to slip 21.7%, outdoing the previous month’s 19.3% decrease.

All times in EDT.

Monday:

4:20 EU ECB’s Bini Smaghi Speaking in Brussels

4:30 EU Sentix Investor Confidence April Exp: -40.7 Prior:-42.7

5:00 EU Euro-Zone PPI (M/M) February Exp: -0.5% Prior:-0.8%

5:00 EU Euro-Zone PPI (Y/Y) February Exp: -1.5% Prior:-0.5%

5:00 EU Euro-Zone Retail Sales (M/M) February Exp: -0.4% Prior: +0.1%

5:00 EU Euro-Zone Retail Sales (Y/Y) February Exp: -2.5% Prior:-2.2%

April IT Bank of Italy Releases Lending and Bad Debt Data for Feb.

April GB New Car Registrations (Y/Y) March Prior:-21.9%

Tuesday:

4:00 IT Hourly Wages (M/M) February Exp: +0.2% Prior: +0.3%

4:00 IT Hourly Wages (Y/Y) February Exp: +3.3% Prior: +3.8%

4:30 GB Industrial Production (M/M) February Exp: -1.2% Prior:-2.6%

4:30 GB Industrial Production (Y/Y) February Exp: -12.5% Prior:-11.4%

4:30 GB Manufacturing Production (M/M) February Exp: -1.5 % Prior:-2.9%

4:30 GB Manufacturing Production (Y/Y) February Exp: -14.2% Prior:-12.8%

5:00 EU Euro-Zone GDP (Q/Q) (SA) Q4 Final Exp: -1.5% Prior:-1.5%

5:00 EU Euro-Zone GDP (Y/Y) (SA) Q4 Final Exp: -1.3% Prior:-1.3%

5:00 EU Euro-Zone Household Cons (Q/Q) Q4 Final Exp: -0.4% Prior:-0.9%

5:00 EU Euro-Zone Gross Fix Cap (Q/Q) Q4 Final Exp: -3.7% Prior:-2.7%

5:00 EU Euro-Zone Gov’t Expend (Q/Q) Q4 Final Exp: +0.1% Prior:-0.6%

19:01 GB Nationwide Consumer Confidence March Exp: +45 Prior: +43

19:01 GB NIESR GDP Estimate March Prior:-1.8%

Wednesday:

2:00 DE Trade Balance February Exp: +7.5B Prior: +8.5B

2:00 DE Current Account (EURO) February Exp: +5.8B Prior: +4.2B

2:00 DE Imports SA (M/M) February Exp: -2.3% Prior:-0.8%

2:00 DE Exports SA (M/M) February Exp: -3.3% Prior:-4.4%

2:45 FR Trade Balance (Euros) February Exp: -4.2B Prior:-4.5B

5:30 GB BRC March Shop Price Index

6:00 DE Factory Orders (M/M) (SA) February Exp: -2.1% Prior:-8.0%

6:00 DE Factory Orders (Y/Y) (NSA) February Exp: -36.5% Prior:-37.9%

Thursday:

2:00 DE Consumer Price Index (M/M) March Final Exp: -0.1% Prior: +0.6%

2:00 DE Consumer Price Index (Y/Y) March Final Exp: +0.5% Prior: +1.0%

2:00 DE CPI - EU Harmonised (M/M) March Final Exp: -0.2% Prior:-0.2%

2:00 DE CPI - EU Harmonised (Y/Y) March Final Exp: +0.4% Prior: +0.4%

2:00 JP Machine Tool Orders (Y/Y) MAR Preliminary Prior:-84.4%

4:00 IT Industrial Production (M/M) (SA) February Exp: -1.5% Prior:-0.2%

4:00 IT Industrial Production (Y/Y) (WDA) February Exp: -17.5% Prior:-16.7%

4:00 IT Industrial Production (Y/Y) (NSA) February Exp: -21.0% Prior:-21.9%

4:00 EU ECB Publishes April Monthly Report

4:30 GB PPI Input NSA (M/M) March Exp: +0.9% Prior: +0.6%

4:30 GB PPI Input NSA (Y/Y) March Exp: -0.7% Prior: +0.5%

4:30 GB PPI Output (M/M) (NSA) March Exp: +0.1% Prior: +0.1%

4:30 GB PPI Output (Y/Y) (NSA) March Exp: +2.1% Prior: +3.1%

4:30 GB PPI Output Core NSA (M/M) March Exp: +0.1% Prior: +0.0%

4:30 GB PPI Output Core NSA (Y/Y) March Exp: +3.1% Prior: +3.7%

4:30 GB Visible Trade Balance February Exp: -£7600 Prior:-£7745

4:30 GB Trade Balance Non euro zone February Exp: -£5500 Prior:-£5704

4:30 GB Total Trade Balance February Exp: -£3450 Prior:-£3585

6:00 DE Industrial Production (M/M) (SA) February Exp: -3.0% Prior:-7.5%

6:00 DE Industrial Production (Y/Y) (NSA WDA) February Exp: -21.7% Prior:-19.3%

7:00 GB Bank of England Announces Interest Rate Decision Exp: 0.5% Prior: 0.5%

12:00 EU ECB’s Mersch Speaks t Event in Luxembourg

Friday:

2:45 FR Consumer Price Index (M/M) March Prior: +0.4%

2:45 FR Consumer Price Index (Y/Y) March Exp: +0.4% Prior: +0.9%

2:45 FR CPI - EU Harmonised (M/M) March Exp: +0.3% Prior: +0.4%

2:45 FR CPI - EU Harmonised (Y/Y) March Exp: +0.5% Prior: +1.0%

2:45 FR CPI Ex Tobacco Index March Exp: 117.93 Prior: +117.59

2:45 FR Central Govt. Balance (Euros) February Prior:-8.1B

2:50 FR Industrial Production (M/M) February Exp: -1.0% Prior:-3.1%

2:50 FR Industrial Production (Y/Y) February Exp: -14.8% Prior:-13.8%

2:50 FR Manufacturing Production (M/M) February Exp: -1.2% Prior:-4.1%

2:50 FR Manufacturing Production (Y/Y) February Exp: -17.6% Prior:-16.5%

April 10-17 DE Wholesale Price Index (M/M) March Prior:-0.1%

April 10-17 DE Wholesale price Index (Y/Y) March Prior:-5.7%