Stocks Notch Longest Weekly Rally Since October

Stocks climbed to another record as investors shrugged off concern over inflation and focused on prospects for an economic rebound. Treasuries fell, while the dollar advanced. The S&P 500 rose by 0.77% to 4,128.80 while Dow Jones was up 297.03 points (0.89%) to 33,800.60.

US Producer Prices Increased by More Than Forecast in March

US producer prices climbed more than forecast last month in a broad advance, indicating inflationary pressures continue to build across the nation’s economy. The producer price index for final demand increased 1% in March from the prior month after a 0.5% gain in February. Excluding volatile food and energy components, the core PPI increased 0.7% from a month earlier.

Biden Boosts Health, Education in US$1.52 Trillion Budget Ask

President Joe Biden proposed major boosts in funding to combat inequality, disease and climate change as part of a US$1.52 trillion budget request for 2022, part of his wider push to redefine the role of government in American lives. The administration’s outline kicks off a months-long process in which Congress is likely to significantly reshape the priorities, given stiff Republican opposition to many of the proposals.

ECB Steps Up Warnings to EU Not to Delay Joint Recovery Stimulus

European Central Bank policy makers stepped up their pressure on the region’s governments to get on with their joint fiscal stimulus, using stronger language to warn of economic chaos for the region if politicians move too slow. Bank of Italy Governor Ignazio Visco called the European Union recovery fund “crucial” and Executive Board member Isabel Schnabel said separately that a long delay would be a “disaster”.

Industry Suffers in Germany and France as Virus Forces Lockdowns

Germany and France, the euro area’s two largest economies, both saw unexpected declines in industrial production in February, suggesting that coronavirus restrictions are increasingly harming parts of the economy that have proved resilient so far. German output dropped 1.6% from the previous month. Production in France slumped 4.7% and stagnated in Spain.

China’s Factory Price Surge Deepens Global Inflation Worries

China’s producer prices climbed in March by the most since July 2018 on surging commodity costs, adding to worries over rising global inflation as the pandemic recedes. The producer price index rose 4.4% from a year earlier after gaining 1.7% in February. The consumer price index increased 0.4% after falling for two straight months.

Taiwan’s Exports Up for Ninth Straight Month on Chip Demand

Taiwan continued to benefit from global demand for its electronics goods, with exports rising for a ninth straight month in March. Exports increased 27.1% last month to almost US$35.9 billion, according to a statement from Taiwan’s Ministry of Finance. Data add to signals from other exporting economies in the region that demand is improving in the US and Europe.

Oil Posts Worst Week in Three With Demand Recovery in Focus

Oil posted its worst week in three amid concerns that rising global coronavirus cases are slowing the economic recovery. Brent crude for June settlement declined US$0.25 to US$62.95 per barrel.

Source: Affin Hwang Research - 12 Apr 2021