Window of affordable housing closes for younger generations

Share Markets: 

There was a soft tone to equity markets overnight.

The FTSE100 was down 0.3% and the German Dax index was flat. In New York, the Dow was flat despite an upward revision to Q4 GDP growth and a modest improvement in its labour market.

The S&P500 fell 0.2% and the Nasdaq was down 0.5%. The overnight market continued the recent trend of heightened daily volatility created by events in Ukraine and speculation over US monetary policy.

Bonds: 

The lacklustre performance of equities was echoed in the bond market with little movement in bond yields. US 10 year government bond yields slipped one basis point to 2.68% and 2 year yields were steady at 0.45%.

In Australia, 3 year government bond yields fell one basis point to 2.99% having risen from 2.79% in early March.

Foreign Exchange:

The US dollar index edged higher against the euro and the yen as its economy grew but both the AUD and the NZD gained ground on the USD.

Expectations are for NZ rates to rise and for Australian rates not to fall.

Commodities: 

Firmer US GDP numbers helped push oil prices higher while gold slipped below US$1300 per oz.

Copper also rose on the better than expected US economic news and on solid growth in Chinese private sector profits.

Australia: 

The HIA-CBA housing affordability index for first home buyers fell to 74.7 in the December quarter of 2013, from 75.1 previously. 

The lift in house prices has overwhelmed the positive impact on affordability from low interest rates.  It is the first fall in the affordability index since late 2010.

China: 

Industrial businesses saw their profits rise 9.4% year-on-year in the first two months of 2014, official data showed yesterday. 

The growth rate was lower than that for the whole of 2013, which stood at 12.2%. 

But it was notably higher than that for December, when profits of industrial companies rose only 6% per cent year-on-year. 

In the first two months, the performance of these firms was uneven. 

State-owned and state-holding industrial enterprises achieved total profits of 216.9 billion yuan, down by 0.2% year-on-year. 

Meanwhile, profits of private firms in China rose the fastest at 16.4% year-on-year in the first two months.

Europe:

Eurozone money supply M3 grew 1.3% in the year to February, up a little from the recent low of 1.0% in the year to December.

New Zealand: 

The trade surplus widened by NZ$532mn to NZ$818mn in February. 

Strong exports growth, especially in the dairy industry, continue to be a feature of the trade data.

United Kingdom:

UK retail sales jumped 1.7% in February, after falling a steeper than previously reported 2.0% in January. Annual growth in retail volumes was lower for the second month at 3.7% over the year, but that is still one of the fastest annual growth rates of the past nine years.

United States:

US GDP growth was revised upward from 2.4% to 2.6% annualised in the final Q4 report.

US initial jobless claims fell 10k to 311k in the week ended 22/3, helping to maintain a downtrend in claims which had appeared to be drifting higher between September and February.

US pending home sales fell 0.8% in February, and January was revised down by 0.3 percentage points to a 0.2% fall.  There have now been eight consecutive monthly declines between July and February, taking sales down 15% since mid-2013.

US Kansas City Fed factory index jumped from 4 to 10 in March, its highest reading in over two years. It is  the only regional Fed index to be close a multi-year high.


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