U.S. new home sales drop in March




Financial Markets

Global equities retreated on Monday as oil prices traded lower and the U.S. dollar weakened. The Stoxx
Europe 600 Index fell 0.5 percent, led by losses among oil and gas, while the MSCI Asia Pacific Index
dropped 0.3 percent as Japanese shares retreated. U.S. equities fell as well with the S&P 500 Index
sliding 0.5 percent in afternoon trading. West Texas Intermediate (WTI), the U.S. benchmark crude, fell
about 1 percent after an inventory spiked at a key storage base. The dollar dropped 0.3 percent versus
the euro to $1.1267, while it fell 0.6 percent versus the yen to 111.10.

China’s interest-rate swaps climbed to a 12-month high on bets stabilizing economy and signs of
speculative trading in commodities and property will hinder the central bank from adding to stimulus. The
cost of 1-year swaps, the fixed payment to receive the floating 7-day repurchase rate, rose 6 basis points
(bps) to 2.62 percent on Monday, the highest level since April 2015. The 5-year swap rate rose 5 bps to
a one-year high of 2.99 percent.


Advanced Markets

U.S. new single-family home sales fell 1.5 percent in March to a seasonally adjusted annual rate of
511,000 units, following an upwardly revised 519,000 units in February. The decline in sales was led by
a plunge of 23.6 percent in the West region, reversing February’s 21.7 percent jump. The Northeast
region remained unchanged, while the Midwest and South rose 18.5 percent and 5 percent, respectively.

U.K.’s industry order book balance rose to -11 in April from March’s reading of -14, higher than
economists’ estimates and the long-run average of -15. According to the Confederation of British
Industry (CBI), the improvement was driven by export orders which rose to -13 from -19 and domestic
price expectations gain to 4 from -1. However, output expectations fell to 17 from 23, while inventories
remained unchanged.

Germany’s business sentiment deteriorated, dropping to 106.6 in April from 106.7 in March, missing
market expectation of 107. According to a survey by the Ifo Institute, firms were less satisfied with the
current situation (113.2 in April from 113.8 in March), but they were optimistic about future business
outlook (100.4 in April from 100 in March).


Emerging and Frontier Economies

Europe and Central Asia

Turkey's manufacturing confidence rose from 106 in March to 110.1 in April, the highest since June 2014,
as expectations regarding the volume of output, total employment and export orders improved. Also,

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expectations regarding fixed investment expenditure increased and general business situation rose to a
5-month high.

Middle East and North Africa

Saudi Arabia’s consumer prices rose 4.3 percent (y/y) in March after the 4.2 percent increase in
February. Upward pressure came from: transport, housing and utilities and food and beverages. On a
monthly basis, consumer prices rose 0.2 percent, after falling by 0.1 percent in February.

Sub-Saharan Africa

Nigeria’s oil output is expected to fall over the next decade, according to industry executives and
analysts, because of uncertainty over reforms to the cash-strapped and debt-laden state oil company,
Nigerian National Petroleum Corporation. The forecast for oil production has dropped 1.5m barrels a day
on average over the next decade. Previous forecasts for the period was 2.1m barrels a day, roughly in
line with present output levels.




April 25, 2016



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