–Markit – New Orders Hit 4 1/2-Year High; Confidence Also Improves
–Markit Says Good Weather Has Helped Demand For New Projects
–Adds To News Flow Suggesting Economy May Have Skirted Recession

LONDON (MNI) – UK construction sector output expanded at its
fastest pace for 21 months and new orders hit a four-and-a-half year
high, according to the latest Markit/CIPS construction sector PMI.

The seasonally adjusted Markit/CIPS Construction Purchasing
Managers’ Index PMI posted 56.7 in March. Up from 54.3 in February, the
index has now posted above the 50.0 no-change threshold in each month
since January 2011.

Markit said that purchasing activity had risen at its
fastest pace in over four years in March. Suppliers’ delivery times
lengthened again.

Input prices faced by UK construction companies rose sharply in
March. Higher raw material costs, particularly for oil, were cited as
the main driver of inflation. Still, the latest increase was below
the long-run trend.

The survey showed growth across all three of the broad construction
categories monitored – housing, commercial and civil engineering.
Commercial was again the strongest performing of the sub-sectors, in
line with the recent trend. Civil engineering activity strengthened and
was the fastest since March 2011.

Markit said that there had only been a slight increase in
residential building.

The data also showed a rise of employment in the sector but the
rate of job creation was only modest.

Chris Williamson, chief economist at Markit said:

“The good weather appears to have led to a surge in demand for
construction projects in March, adding to the recent flow of good news
which suggests the economy will have skirted a recession.

But he warned that:

“Looking ahead, the lack of big new projects such as Crossrail and
the Olympics means expectations about the year ahead continued to run
well below the pre-crisis peaks, but business confidence nevertheless
reached the highest for nearly two years, driven up by expectations of
increases in new order intakes and improving client optimism.

“The particularly encouraging news is that the improvement in
confidence is generating more jobs, with employment rising modestly.”

–London newsroom: +44 207 862 7491; email: ukeditorial@marketnews.com

[TOPICS: MABDS$,M$B$$$]

February: +0.6% m/m, +3.6% y/y

MNI survey median: +0.5% m/m, +3.4% y/y
MNI survey range: +0.4% to +1.0% m/m

January: +0.8% m/m, +3.8% y/y (revised from +0.7%/+3.7%)
December: -0.2% m/m, +4.3% y/y (unrevised)
November: +0.3% m/m, +5.4% y/y (revised from +0.2% m/m)
October: +0.1% m/m, +5.5% y/y (unrevised)
September: +0.3% m/m, +5.8% y/y (unrevised)
–

FRANKFURT (MNI) – Eurozone producer prices rose slightly faster
than expected in February, with gains in all major components led by
energy, Eurostat reported on Tuesday.

Taking into account upward revisions in January, producer price
inflation came to +0.6% on the month in February, resulting in an annual
rate of +3.6%.

Energy remained the main driver, rising 1.2% on the month for an
annual increase of 9.3%. Excluding energy, core PPI rose 0.4% and 1.7%
on the month and year, respectively.

Supply issues with non-OPEC member states and ongoing geopolitical
tensions have helped keep oil prices consistently well above $120 a
barrel.

Saudi Oil Minister Ali al-Naimi argued recently that there is “no
lack of supply.” Rather, “it is the perceived potential shortage of oil
keeping prices high – not the reality on the ground.”

Intermediate goods prices, usually the first to reflect commodity
prices trends, were up 0.6% m/m to give an annual rise of 1.1%. Capital
goods prices increased 0.2% between January and February, keeping the
annual rate unchanged at +1.4%.

Durable and non-durable consumer goods both rose 0.3% on the month.
On an annual basis, consumer durables were 2.4% more expensive on the
year, while non-durables were up 2.9%.

With oil firmly above $120, the proportion of manufacturers looking
to raise prices continued to trend upwards, a European Commission survey
showed.

Manufacturers blamed rising oil prices for most of the pick-up in
input price inflation in March, according to a recent PMI report. Yet
factory gate prices rose only modestly, reflecting strong competition
and weak demand.

In an interview earlier this week, ECB Governing Council member
Josef Bonnuci asserted that costlier oil was a bigger threat to Eurozone
economic growth than to price stability.

“At present there are no clear signs that higher oil prices have
led to more permanent domestic price pressures in the Eurozone as a
whole,” he said.

Last month, the ECB’s staff revised up its projection for Eurozone
inflation this year to between +2.1% and +2.7%. For 2013, inflation is
expected to range between +0.9% and +2.3%.

– Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com

[TOPICS: M$X$$$,M$XDS$,MT$$$$,M$$EC$,MTABLE]

EMU DATA: February industrial PPI +0.6% m/m, +3.6% y/y
– EMU January PPI m/m rev +0.8% (+0.7%); y/y rev +3.8% (+3.7%)
– EMU February PPI above MNI median fcasts (+0.5%/+3.4%)
– EMU February energy PPI +1.2% m/m, +9.3% y/y; January +2.3%/+9.2%
– EMU February PPI ex-energy +0.4% m/m, +1.7% y/y; January +0.3%/+2.0%
– See MNI MainWire for details

Annual rate rises to 3.6% (above Reuters poll of 3.4%)

Jan producer prices revised from 0.7% to 0.8%m/m.  and from 3.7% to 3.8% y/y

Sarkozy est le pain grille

Extends the rout post RBA to 1.0373 and has filled some real money , sovereign bids in the 1.0380/90 area.

There are sell stops apparently placed on a break of 1.0370 and 1.0350 below ahead of some very large bids reportedly ahead of a barrier at 1.0300 (part of a 1.0300-1.0900 DNT).

EUR/AUD’s recently trundled up to a day’s high of 1.2854 on the move

AUD’s  at 1.0376

–New Orders Hit 4 1/2-Year High; Confidence Also Improves

LONDON (MNI) – UK construction sector output expanded at its
fastest pace for 21 months and new orders hit a four-and-a-half year
high, according to the latest Markit/CIPS construction sector PMI.

The seasonally adjusted Markit/CIPS Construction Purchasing
Managers’ Index PMI posted 56.7 in March. Up from 54.3 in February, the
index has now posted above the 50.0 no-change threshold in each month
since January 2011.

–London newsroom: +44 207 862 7491; email: ukeditorial@marketnews.com

[TOPICS: MABDS$,M$B$$$]

HSBC this time,  with a recommendation to short AUD/CAD at 1.0288 for  1.0050. Stops loss at 1.0410.

This is based on the CAD being better equipped to out-perform the AUD on the back of a US recovery.

The RBA announcement today which hinted strongly at an RBA cut in May of around 25bps .. makes sense to me

AUD/CAD’s at 1.0286

Consensus 53.5 with Reuters, cable’s up around 10 pips on the stronger data to 1.6030

Fastest rise in new orders for the UK construction sector in  4.5 yrs

But this is ridiculous.

EUR/USD sits at 1.3345, up 5 pips since I sat down.

Talk of BIS having sold circa 1.3355, ACB circa 1.3350.

We’re not really any lower though.  What does that mean?  Hope it means we’ll soon be headed higher.  It’s more in hope than any strong conviction.

North of there, talk of sell orders clustered 1.3380/00 ahead of 1.3400 barrier interest.

Plus ca change, plus c’est la meme chose.  That’s French that is

On the downside, talk buy orders clustered 1.3300/10.  Where are the sell stops gathering? Blowed if I know.

Japanese bank Nomura has apparently issued a trade recommendation selling EUR/JPY at 109.50 with a target of 106.00 and a stop at 111.00.

Reasons for the trade are cited as all the latest factors for the rise are running out of steam, such as US Treasury yields, recent BOJ easing and lack of improving data in the Eurozone

EUR/JPY’s sitting at 109.53

We’re at 82.05 from the 81.95 which greeted me about two and a half hours ago, as European trading gets off to a very slow start.

Talk of buy orders clustered now down at 81.80/85 and more at 81.50/60, sell stops below there.

On topside, buy stops seen through 82.25 before sell orders clustered 82.50/60.

All FT articles, so you’ll have to do a google search using the headlines:

“A divorce settlement for the eurozone”

By Arnab Das and Nouriel Roubini

“No break-up: the euro needs parental love”

By Martin Sandbu

“The timebomb no one can defuse”

By Gideon Rachman

Guess I betta get you some stuff to read.  This could be a loooooong morning.

Financial bookies see FTSE and DAX up around +0.2%, CAC 40 up around +0.1%.

CNBC article

Got any ideas you’d like to share with your fellow readers, then here’s where to stick ‘em.

I haven’t read the whole text but the comment “prudent to wait for inflation data before easing” says to me that if the next CPI data confirms what the TD-MI data said yesterday, then we will see a 25bps cut next month.

AUD/USD now back at session lows near 1.0410.

• Growth somewhat lower than estimated
• No sign of deep global downturn
• Prudent to wait for inflation data before easing

Full text

• Fed’s loose policies fail to take other’s into account and create liquidity risks for emerging economies: PBOC
• Australian retail sales +0.2% MoM, +0.3% expected
• Japanese wages show first overall rise in 9 months
• UK small business sees recovery in sales and orders
• Nikkei -0.4%, other regional Bourses +0.5%, China closed again
• Gold $1680/oz; Oil $104.75/bbl

The USD has been soft across the board today with selling in pairs like USD/KRW and stop-loss hunts in USD/JPY setting the tone.

USD/JPY opened over 100 pips below yesterday’s Asian close and after a quiet start near 82.10, the market saw a sharp stop-loss driven sell-off just before the Tokyo open, which sent the pair 50 pips lower in 5 minutes before recovering. Ranges: 81.54/82.22

AUD/USD has moved slowly higher ahead of the RBA rate decision and has been up-and-down in a 30 pip range on a few occasions. The slightly lower-than-expected retail sales figures were more or less ignored, with traders focussed on the RBA. Pre-RBA range 1.0403/51

EUR/USD has been getting it’s lead from the Asian currencies with little in the way of EUR flow reported. Ranges: 1.3312/55

Cable 1.6017/46; EUR/CHF 1.2033/40