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Manufacturing output on the way down meets retail sales on the way up
It was a day of mixed statistics yesterday in the UK, where it was announced that manufacturing output had declined by 5.5% in the first three months of 2009, the highest quarterly fall since records began in 1948.
On a more positive note the Office for National Statistics (ONS) also announced that the trade deficit in the UK narrowed by £300 million pounds in March. (£2.5bn in March from £2.8bn in February) The British Retail Consortium was happy to be given the opportunity to make a positive announcement and that was that retail sales had raised in April, and not only that but at their fastest rate in three years. To be truthful, these figures were boosted by the fact that Easter fell in April this year, and when taking the overall picture of retail sales between March and April the figures are slightly less encouraging, but far from being a disaster.
April house prices in England and Wales were also showing signs of recovery, falling at their slowest pace since February 2008. There seems to be an upsurge in buyer interest, according to the monthly survey released the Royal Institution of Chartered Surveyors.
It appears likely that the Bank of England, when they release their quarterly Inflation Report today, will announce a reduction in their recent growth forecasts. Some tough questions are expected to be fired at the Bank's governor Mervyn King over his decision last week to increase up quantitative easing measures.
The FTSE put up a weak performance yesterday, especially from the banking sector. Lloyds Banking Group fell 10.3 percent to (9 pence to 89.1), while Barclays faded by 6.5 percent (17 pence to 268). RBS were the best of a bad lot, slipping only 5.6 per cent (3.5 pence to 43.5)
The FTSE 250 index rose by 13.56 points to close on 7,623.92
while the FTSE 100 finished the session down 9.96 points, at 4,425.54
The currency market was stable, with the dollar continuing to slip backwards against the major currencies, while the pound climbed to a four-month high as recent signs that the UK economic downturn has reached bottom.
- Pound/Japanese Yen 147.16
Trading on Wall Street was best described as indifferent with the Dow Jones Average rising 50.34 to close on 8469.11. Nasdaq fell 15.32 points to 1715.92
Bank of America announced on Tuesday that they had succeeded in raising $7.3billion by selling their stake in China Construction Bank . BoA held close to 6 per cent of CCB shares which they have sold of a group of Asian investors. They money will go towards increasing their cash reserves as stipulated by the US treasury during their recent "fitness" tests.
In Asia, Hitachi the electronics giant displayed that when they make a loss, they do it in style. In fact, the company succeeded in breaking the Japanese record for an annual loss, largely due to a dramatic reduction in sales. Their net loss for 2008 was a whopping 787.3billion yen (£5.3billion). Small time when compared to some of the losses made in the US and UK, but still enough to bring tears to a few Japanese eyes. To leave room for some optimism, Hitachi announced that they only expect to lose around 270bn yen in 2009.
There weren't too many happy and smiling faces around yesterday at the Chinese export board on news that export figures from April showed a decrease of 22.6% from the comparative month in 2008, making for the sixth successive month of decline.
However financial analysts continue to send out positive signs that when the global economy does regain full steam, it will be China pulling on the whistle. Their optimism has been backed up by the news that business investment in China has increased by 30.5 per cent since the beginning of the year.
Another sure but slightly worrying sign that things are slowly creeping back to normal is the news that crude oil prices have risen to their highest level in six months.
US crude rose as high as $60.08 a barrel before falling back, while London Brent crude rose to $58.64.
The price of US crude is now up by about 80% from its recent low of $32.70 a barrel, but thankfully very far away from its record high of $147 from the summer of 2008. Let's hope these days do not return.
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