Financial Markets
Oil prices fell on Monday as doubts grew over whether major crude producers will be able to agree on an output freeze. Brent, the global benchmark, slid 0.7 percent to $38.43 a barrel, after falling as much as 1.4 percent earlier, while West Texas Intermediate (WTI), the U.S. benchmark, slipped 0.4 percent to $36.43 a barrel. Prices have tumbled from above $100 a barrel since mid-2014, hitting record lows in late January, but they have rallied somewhat recently in anticipation of an agreement among top exporters to rein in overproduction.
U.S. Treasury prices fell on Monday, pushing yields higher, as weaker-than-expected U.S. factory data signaled a further slowdown in GDP growth in Q1. The yield on the 10-year U.S. Treasury note fell 2 basis points (bps) to 1.772 percent, after touching one-month low of 1.753 percent earlier. The yield on the 2-year Treasury securities dropped 3 bps to 0.764%. Meanwhile, the yield on 10-year German Bunds was at one-month low of 0.14 percent.
Advanced Markets
U.S. new orders for manufactured goods slumped 1.7 percent (m/m) in February, following a downwardly revised 1.2 percent gain in January, matching expectations. The decline was partly due to the stronger U.S. dollar and weaker demand from the energy sector.
Japanese manufacturing firms’ long-term inflation expectations worsened in 2016 Q1. The Bank of Japan’s survey indicated that inflation expectations for five-year and three-year ahead retreated to 1.2 percent and 1.1 percent in 2016 Q1 from 1.4 percent and 1.3 percent, respectively in Q3.
The Euro Area unemployment rate fell to 10.3 percent in February from the upwardly revised 10.4 percent in January, its lowest level since 2011. Further, investor confidence index (Sentix) sentiment rose to 5.7 in April compared to 5.5 in March. However, this was below the market expectation of 7.
Emerging and Developing Economies
Europe and Central Asia
The Bosnia and Herzegovina economy expanded 2.1 percent (y/y) in Q4, slowing from an upwardly revised 3.7 percent growth in Q3. The manufacturing sector and wholesale and retail trade industry advanced, while public administration and defense, and utilities contracted. On a quarterly seasonally adjusted basis, the GDP advanced 0.3 percent, following a 0.6 percent rise in Q3.
Sub-Sahara Africa
The central bank of Uganda lowered its benchmark lending rate by 100bps to 16 percent. It is the first rate cut since June 2014, with policymakers citing lower growth and subdued consumer demand.
Consumer prices in Ethiopia rose 7.5 percent (y/y) in March, easing from an upwardly revised of 8.9 percent increase in February. It is the lowest figure since December 2014, as prices of food and non-food went up at a slower pace.
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