US leading economic index flashes recession. Suggesting worsening economic conditions ahead, a report released by the Conference Board on Thursday showing that its index of leading US economic indicators fell sharply in March. The latest Conference Board Leading Economic Index (LEI) for March slipped to 108.4 from February's revised figure of 109.7, marking the 12th monthly decline in a row and the lowest level since November 2020. Today's reading represented a 1.2 percent month-over-month decline, worse than the forecasted 0.6 percent fall, and the sharpest drop since April 2020. The latest US economic data suggests a recession is coming, according to the chief executive of financial advisory firm Longview Economics.
German consumer morale brightens. Consumer confidence among Germans is expected to strengthen in May as a key survey shows that households are more positive about their income prospects following higher expectations for wage growth amid moderating inflation. The Germany Gfk Consumer Sentiment Index that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation improved from -29.3 in March to -25.7 in April, above expectations of -27.5. In April, economic expectations soared from 3.7 to 14.3 and income expectations rose from -24.3 to -10.7. The propensity to buy segment of the index jumped from -17.0 to -13.1. Sentiment is back on track to recovery after a slowdown last month, but "the value still remains below the pre-pandemic level of about three years ago," said GfK consumer expert Rolf Buerkl.
China’s industrial profits keep plunging as prices decline. Profits at industrial firms in China continued to plummet in the first quarter of this calendar year, as a recovery in factory production was not enough to compensate for price declines. Industrial profits in the January-March period tanked 21.4 percent from a year earlier, the National Bureau of Statistics said on Thursday. The drop narrowed only slightly from a fall of 22.9 percent in the first two months of 2023. Profits for March alone fell by 19.2 percent from the same period last year, according to the figures. "With production and life further normalizing, businesses stepping out of difficulties and policies continuing to play their part in stabilising the economy, industrial firms' operations are expected to stabilise and turn around in the second quarter," Luo Huanjie, senior researcher at the Zhixin Investment Research Institute, said in a note to clients.
Australia’s inflation falls from peak but still above RBA target. Australian inflation retreated from its highest level in 33 years in the first quarter of this calendar year, as the cost of living saw the smallest rise in more than a year, suggesting there will be less need for the central bank to raise interest rates. The headline consumer price index for the first three months of 2023 came in at an annual rate of seven percent according to the Australian Bureau of Statistics. That was in line with economists’ predictions, and slower than the 7.8 percent pace registered in the December quarter. However, a cause for concern for the Reserve Bank of Australia, according to Commonwealth Bank of Australia's head of Australian economics Gareth Aird, is that almost all of the inflation over the past three months was domestically generated and not caused by higher imported energy prices.
Japan keeps monetary policy unchanged. In its much-awaited monetary policy meeting on Friday, the Bank of Japan (BOJ) kept its ultra-low interest rate policy unchanged but announced a broad review of its monetary policy, laying the groundwork to gradually phase out the massive stimulus programme. "The Bank has decided to conduct a broad-perspective review of monetary policy, with a planned time frame of around twelve to eighteen months," the BOJ said in a statement. The statement was widely interpreted as an extended commitment to the current policy framework, weakening the Japanese currency.
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