G3 Recap 4-20-11

Main Items:

  • US Existing Home Sales improved to 5.1mm in March vs 5.0 expected and 4.9 previously. NAR noted that 35% of sales were all cash, and 40% of all sales were distressed, both higher than February.
  • BoE Minutes showed a 6-3 vote against hiking, unchanged from before. This has resulted in many dealers pushing back their forecasts for the first MPC hike. The minutes showed that uncertainty regarding the sustainability of growth is a key reason the majority is delaying action.
  • Riksbank hikes 25bps to 1.75% as expected. There were no changes to the Riksbank’s forecasted repo rate path, which remains broadly in line with market pricing: 2.5% by YE2011 and 3.25% by YE2012.
  • Draghi is gaining ground in the race to succeed Trichet; German officials have unofficially given their backing to the Italian – WSJ

Overseas:

  • German PPI Rose 6.2% YoY in March vs 6.6% expected and 6.4% previously

Commentary:

  • While earnings are coming in nicely above expectations, the 3 month mean beat-miss differential has fallen back to its long term average. Historically, this has been coincident with slower pace of price appreciation:

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