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Broadgate: Market News 12/3

12 March 2012

Asian stocks fell for the first time in three days. The Chinese yuan lost 0.19 percent to 6.3224 per dollar for the biggest drop since January after Chinese exports grew at a slower pace than forecast. China posted its largest trade deficit since at least 1989 last month, according to a government report on March 10. Europe’s sovereign-debt turmoil has been blamed for the decrease in exports, while imports rebounded after a weeklong holiday.

Economists expect a Japanese government report today will show machinery orders gained 2.3 percent in January after falling 7.1 percent in December. The report is due at 8:50 a.m. Tokyo time. The Bank of Japan will also start a two-day policy meeting today.

Better-than-expected U.S. jobs data pushed the dollar to a 10 month high against the yen, boosting the earnings outlook for the Asian nation’s exporters as a result and causing Japanese stock futures to rise.

U.S. stocks also advanced after employers added more jobs than forecast, helping the S&P 500 recover from a 1.5 percent drop on March 6 that was the largest loss since December 8. The U.S. economy is predicted to expand 2.2 percent this year, according to the median forecasts of 79 economists in a Bloomberg survey. Although that is higher than 1.7 percent in 2011, it remains less than the 3.7 percent average from 1983 to 2000.

Despite the U.S. economy showing growth for 10 straight quarters, Labor Department data shows that average hourly earnings rose just 1.9 percent in February, almost the smallest increase since April. Transportation and industrial shares are diverging in the U.S., a signal that equity investors are starting to acknowledge that this economic recovery will remain sluggish for months to come.

Gross domestic product in the U.S. has expanded at an average annual rate of 2.5 percent since the recession ended in June 2009, making this the weakest recovery in at least six decades.

The information set out herein has been obtained from various public sources and is by way of information only. Broadgate Financial can accept no liability of any sort in relation thereto and readers should obtain their own verification of any statement before making any decision which may have any financial or other impact.

Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell investments.