GBP unable to keep ahead
In the UK the end of the first homebuyer stamp duty exemption in March has not encouraged house purchasers in January and February. That should have boosted mortgage approvals that month, but the extremely cold weather in February may have tempered activity. The Housing figures out this morning show dip in house prices versus this time last year. After the disappointing fall in Q4 GDP figures released yesterday GBP has not helped itself
The German unemployment rate remains at a pre-unification low and a further 10,000 falls is anticipated in March as the German government looks at loosening restrictions on the immigration of highly skilled workers in order to restrain wage pressure. A fall of that magnitude would still leave the unemployment rate at 6.8%.
The usual end of month EU Commission surveys for March will help flesh out market expectations for Q1 growth. The eurozone is expected to contract entering a technical recession in the March quarter. But the hope is that ECB rate cuts and the LTROs will ensure that any downturn is relatively modest. If that expectation is met then we would need to see a sharper improvement in the business climate indicator than consensus expects.
US initial jobless claims rose by 348,000 last week, their lowest rate since July 2008. It is therefore hardly surprising that some pullback is expected this week but the four week average of 350,000 is significantly down from the 400,000 seen at the end of 2011. So the labour market is recovering, it is simply going slow at a pace consistent with 250,000 jobs being created rather than the 350,000 that would be needed to start creating large inroads into the stock of unemployed.
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