The US equity markets continued to grind higher as fears related to Greek debt started to subside. Petroleum product, which includes gasoline and crude oil, rallied substantially today, as crude increased to $82.08 up more than $2 dollars per barrel or 2.5%. The Euro barely changed, and the pound increased on better than expect consumer-lending numbers.
In its upcoming auction, Greece is looking to raise as much as €5 billion ($6.71 billion) from its third bond offering of 2010. This bond issuance is coming a few days after the European Union announced a rescue plan in case of Greek debt insolvency. The bond auction will likely yield around 5.90%, compared with the 2.67% interest on Bunds, which are German government bonds. The pricing of the bonds, gives an effective boost to Greek debt instruments, and might placate the markets.
Additionally in Europe, German March inflation surprised to the upside. The 0.5% rise in March translates into a 1.1% year-over-year rate (EU harmonized measure 1.3%) This is the highest since November 2008. It appears, in part, to reflect higher energy prices. The increase in food and clothing prices could also be in part caused by recent poor weather.
In the U.K., consumer lending posted its strongest rise for 19 months in February, according to BOE data on Monday. Unfortunately, the number of loans that were approved for house purchase fell to the lowest level for the past nine months. The BOE said net lending to individuals totaled £2.1 billion in February, up from a revised £1.9 billion in January. Net lending was more robust than the market consensus estimate of £1.4 billion. Unfortunately, net lending remains less than 25% of the £8.8 billion seen in February 2008.
In the U.S., Personal income was flat on a month over month basis according to the Commerce Department. Personal spending by consumers in the United States, increased by 0.3% from last month. Consensus estimates where for a 0.1% increases in income and a 0.3% increase in spending for February. The core price index for personal consumption expenditures, which excludes food and energy, rose 1.3% compared to February 2009.