CANADA
- jobs data disappoints, falling 61k in March versus expectations of a drop of 50k; the net loss of jobs since employment peaked last October is now 357k; the drop in full-time employment has been more severe, at 409k; full-time employment fell about 80k while part-time reclaimed part of that loss, up about 20k
- unemployment rate, as expected, climbed to 8.0% from 7.7% last month and from the cyclical low of 5.8%; it was briefly this high at the start of 2002, but otherwise it was last higher than 8% throughout the 90s
- the employment rate has fallen from 65% to under 62%; admittedly, a lot of the drop is due to seasonality; usually the rate peaks in June and troughs in January, before resuming its climb back to June; but this is the first year since 1991 in which January did not mark the trough, as employment has fallen further in both February and March
- average hourly wages were flat on the month but up to 4.1% YoY; however, as in the U.S., though wages are holding steady per hour for those still working, there are fewer people working fewer hours, so incomes are down
- the February trade balance was slightly positive, relative to expectations of a small trade deficit consistent with last month
- new home prices fell for the fifth straight month, down 0.7% MoM in February
U.S.
- initial jobless claims held pretty steady, at 654k; the 4-week moving average held steady at 657k; continuing claims continued its steady climb to 5.84M
- the U.S. trade deficit continues to fall quickly, down to $26B in February versus expectations of a steady result matching January's -$36B, despite higher oil prices during the month --- exports were up modestly, up 1% MoM, while imports fell significantly, down 5.1% MoM; exports are now down 17% YoY while imports are down 29% YoY
- chain store sales later today
INTERNATIONAL
- Japan machine tool orders are down 85% YoY, but at least machinery orders were down just 30% YoY, up from -40% in February and not as bad as the -37% expectation
- German CPI is up 0.5% YoY
- Italian industrial production down 24% YoY, while Germany's is down 21% YoY
- the BoE held rates steady at 0.50%, but reaffirmed their commitment to quantitiative easing, both in terms of the size of the program and the pace - 10yr gilts are holding in on the reaffirmation, but have nonetheless given up most of the gains they achieved right after Q.E. was first announced (10yrs fell from a yield of 3.65 to 2.95 and are now 3.35)
- aside: could the BoE's approach be the route the BoC takes in a few weeks? I anticipate that they will declare the current rate of 0.50% the ceiling, but will allow themselves flexibility on an intra-meeting basis to allow the rate to fluctuate between 0 and 0.5 (i.e. much like the Fed's 0 to 0.25, but with a higher range), while initiating a modest Q.E. program; my guess is that the Bank will not go the Fed-route of credit easing by intentionally targeting specific areas of the credit markets, but will instead stick to buying GoC debt, and will prefer to leave credit allocation decisions to the free markets, with some help from fiscal authorities (through the EDC, BDB, the mortgage-buying program, etc.)
OTHER
- TED spread holding steady around 0.95, where its been since mid-January, much better than the 4.60 peak in October, though of course not back to the 0.25-0.30 range that predated the crisis
- the Baltic Dry Index has fallen now for 21 straight days; it remains 120% above its December low, but now down 36% in the last month and 88% from its peak last May
- the VIX fell below 40 yesterday (38.85), for only the third time since Jan. 6
- OECD leading indicators will be updated tomorrow
- Tiger tees off at 1:52
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