Asia

China’s Inflation Slows More Than Estimated. Consumer inflation in China moderated to an 18-month low and the decline in factory-gate prices persisted, giving the government more scope to loosen policies if a growth slowdown deepens. The consumer price index rose 1.8 % from a year earlier in April, the National Bureau of Statistics said today in Beijing. That compares with the median estimate of 2.1 % in a Bloomberg News survey and a 2.4 % gain in March. The producer-price index fell 2 %, the 26th straight decline, after a 2.3 % drop the previous month. (Bloomberg)

China Pledges To Push Ahead With Capital Market Reforms. China pledged on Friday to push ahead with a broad range of capital market reforms as it seeks to encourage more efficient capital allocation, increase foreign investment and improve transparency of its markets. In a wide-ranging statement of policy principles, the State Council said it would develop a system for direct bond issuance by local governments, streamline the approval process for initial public offerings (IPOs), and remove some restrictions on the use of financial derivatives. (Reuters)

North America

US Central Bank In No Rush To Decide On Balance Sheet’s Size, Says Yellen. THE US Federal Reserve is in no rush to decide the appropriate size of its balance sheet, but if it ultimately shrinks it to a pre-crisis size, the process could take the better part of a decade, Fed chair Janet Yellen says. Yellen, in testimony to a Senate panel, says no decision has yet been made on the central bank’s portfolio of assets, which has swollen to US$4.5 trillion from about US$800bil in 2007. Three rounds of asset purchases meant to stimulate the economy in the wake of the 2007-2009 financial crisis have boosted the balance sheet to this record level. Unsatisfied with the US recovery, the Fed is still adding US$45bil in bonds each month, though the purchases should end later this year. Yellen says the portfolio should start to shrink once the Fed decides to raise near-zero interest rates. (Reuters)

US Wholesale Inventories Surge, May Help Boost Q1 Growth. U.S. wholesale inventories rose more than expected in March, suggesting restocking of goods was probably less of a drag on first-quarter growth than initially thought. The Commerce Department said on Friday wholesale inventories increased 1.1 % after rising by an upwardly revised 0.7 % in February. Economists polled by Reuters had expected wholesale stocks to rise 0.5 % in March after a previously reported 0.5 % gain in February. (Reuters)

Employers In U.S. Put Out Fewer Help-Wanted Signs In March. Employers in the U.S. put up fewer help-wanted signs in March, showing last month’s hiring swell will probably give way to more moderate payroll growth. The number of positions waiting to be filled fell by 111,000 to 4.01 million in March from a revised 4.13 million the prior month, the Labor Department reported today in Washington. Openings surged by 251,000 in February, the biggest jump in a year. (Bloomberg)

Canada Unexpectedly Loses Jobs In April. Canadian employment declined for the second time in three months in April, casting doubt on the Bank of Canada’s forecast for a rebound this quarter. Employment fell by 28,900 in April, Statistics Canada said today in Ottawa. The unemployment rate remained at 6.9 % as 25,600 people also left the labor force, reducing the participation rate to the lowest since November 2001. Economists surveyed by Bloomberg News projected a 13,500 job increase and a jobless rate unchanged at 6.9 %, according to median forecasts. (Bloomberg)

Europe

German Exports Post Big Fall In March, Trade Drags On Q1. German exports posted their biggest fall in nearly a year in March and imports also dipped as the crisis in Ukraine and a slowdown in China weighed, narrowing the trade surplus and confirming trade was a drag on growth at the start of 2014. Figures from the Federal Statistics Office showed seasonally adjusted exports slipped 1.8% on the month, their second consecutive fall, and imports dipped 0.9 %, pushing the trade surplus down to 14.8 billion euros. The consensus forecast in a Reuters poll of economists had been for shipments abroad to rise by 1% and for imports to increase by 0.5%. The seasonally adjusted trade balance compared with a surplus of €15.8bil in February. Economists had expected a surplus of €16.6bil in March. (Reuters)

Portugal’s Rating Raised By Moody’s On Improving Fiscal Health. Portugal’s government bond rating was raised to Ba2 from Ba3 by Moody’s Investors Service, which cited faster-than-projected improvement in fiscal health. The rating, still below investment grade, was placed on review for possible further upgrade. The budget deficit was reduced a full %age point of gross domestic product more than envisaged last year, indicating the government’s strong commitment to fiscal consolidation, New York-based Moody’s said in a statement today. The bond rating outlook had been revised to stable from negative on Nov. 8. (Bloomberg)

S&P Revises Portugal Credit Outlook To Stable From Negative. Standard & Poor's on Friday revised its outlook on Portugal to stable from negative and kept its credit rating at BB. The outlook upgrade was expected by some analysts and came after Portugal on Sunday declared it would exit its three-year 78-billion-euro bailout this month without a precautionary credit line. Last month, Lisbon sold its first bonds at auction in three years, paying a record low yield that was seen as vote of market confidence. (Reuters)

UK: More Permanent Jobs Created In April. The number of permanent roles filled in the UK grew in April compared to a month earlier, according to a report. But the rate of expansion was slower than a peak seen in February this year, which was the fastest expansion in nearly four years. There was also a shortage of skilled people for new positions as workers preferred to stay with their current employers. Demand for workers was "strong", said the study by Markit. About half of the respondents noted an increase in placements, compared with about 19% who signalled a decline.The firm's index rose to 63.8 in April from 62.6 in March. A score above 50 indicates a higher number of placements than the previous month. (BBC)

U.K. Manufacturing Rises More Than Forecast. U.K. manufacturing production expanded more than economists forecast in March, adding to evidence that the economic recovery is gathering strength. Output rose 0.5 % from February, when it gained 1 %, the Office for National Statistics said today. Economists forecast a gain of 0.3 %, based on the median of 21 estimates in a Bloomberg survey. Industrial production fell 0.1 % as oil and gas extraction plunged, though the decline was less than estimated. (Bloomberg)

Currencies

Euro Drops Through $1.38 To One-Month Low. The euro slid against the dollar on Friday, dropping through the $1.38 threshold to its lowest level in a month as traders continued to react to the dovish tone of the European Central Bank on Thursday. The euro traded at $1.3755 on Friday, down nearly a full cent from $1.3851 late Thursday. The ICE dollar index climbed to 79.878 from 79.433 late Thursday. Against the Japanese yen, the dollar climbed to ¥101.81 from ¥101.57 on Thursday. The British pound slid against the dollar to $1.6848 from $1.6932. The Australian dollar also fell to 93.58 U.S. cents from 93.73 cents. (Market Watch)

Commodities

U.S. Crude Edged Lower In Range Bound Trade. U.S. crude futures fell modestly in range-bound trade on Friday as the market balanced support from a drawdown in domestic crude stockpiles against technical sell points that have kept oil from rallying, while Brent was lower as traders awaited developments in the Ukraine crisis. U.S. crude oil settled 27 cents down at $99.99 per barrel, and edged 0.24 % higher over last week after U.S. government data on Wednesday showed crude supplies fell last week for the first time since late March, though overall supplies are still at record highs. Brent futures fell 15 cents to settle $107.89 per barrel, and was on track to shed about half a % over last week. (Reuters)

Gold Down For Week On Dollar Rise, Fed; Platinum Drops. Gold dropped on Friday, notching its second consecutive weekly drop, with selling triggered by a sharp rise in the U.S. dollar and analysts' expectation that the Federal Reserve could raise interest rates next year. Spot gold was down 0.1 % at $1,287.51 an ounce by 3:16 p.m. (1916 GMT). Silver eased 0.1 % to $19.11. Platinum was down 0.4 % to $1,426.75 an ounce, while palladium fell 0.5 % to $796.60. (Reuters )