Recap 5-02-13




  • The ECB cut rates by 25bps to 0.50% as exp. The Marginal Lending rate was cut 50bps to 1%. Vote for cut was not unanimous. Nothing specific was announced with respect to supporting funding for SMEs.
  1. Draghi on negative deposit rates: “On the deposit facility rate, we said it in the past: we are technically ready. There are several unintended consequences that may stem from this measure. We will address and cope with these consequences if we decide to act. We will look at this with an open mind and we stand ready to act if needed.”
  2. In the Q&A session Mr. Draghi said the ECB is “not in the business of monetary financing … buying government bonds”.

US initial jobless claims declined to 324k last week vs 345k exp and 339k prev. This is the best reading since 2008.

US unit Labor Costs rose 0.5% in 1Q vs 0.7% exp and 4.6% prev

WSJ: The number of bond funds that own stocks has surged to its highest point in at least 18 years. (That’s 1995… h/t Danny)

Italy Mfg PMI improved to 45.5 in April vs 45 exp and 44.5 prev

China HSBC PMI declined to 50.4 vs 50.5 exp and 51.6 prev

Upcoming Data:

  • Fri: UK PMI Services, US Employment, US ISM Non-Mfg
  • Mon: Australia Retail Sales, China HSBC Services PMI, Italy Services PMI, EU Retail Sales, CanadaBuilding Permits, Au Trade Balance
  • Tues: RBA
  • Wed: Canadian Housing Starts, China CPI, Australia Employment
  • Thu: UK IP, BoE, Canada New House Price Index, US Jobless Claims