U.S. core capital goods orders dip, but shipments surge
New orders for key U.S.-made capital goods unexpectedly fell in February, but a surge in shipments amid demand for machinery and electrical equipment supported expectations for an acceleration in business investment in the first quarter. The Commerce Department said on Friday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1 percent last month after rising 0.1 percent in January. Shipments of these so-called core capital goods jumped 1.0 percent after declining 0.3 percent in January. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement. Economists polled by Reuters had forecast core capital goods orders rising 0.6 percent last month.
Euro zone economy sparkles, lights way for ECB pull-back
If the latest surveys of business intentions are to be believed, the euro zone economy is sparkling, growing at a pace that easily explains the hints from some European Central Bank policymakers of a pull-back from their easy-money regime. IHS Markit’s euro zone Flash Composite Purchasing Managers’ Index (PMI), an influential guide to the buying plans of businesses and hence growth, hit a near six-year high this month. It climbed to 56.7 from February’s 56.0, its highest reading since April 2011 and better than any predictions in a Reuters poll. At the same time, flash surveys for the currency bloc’s two largest economies — Germany and France — also stormed past expectations to register near six-year highs, conditions likely to play into elections in both countries this year.
China debt risk ‘very much under control’: vice finance minister
China’s debt risks are "very much under control", but local governments must ensure that the increase in their debt spending this year is within stipulated limits, Vice Finance Minister Liu Wei said on Friday. Beijing tightened controls in recent years on new local government debt to ward off risks from an earlier borrowing binge that was aimed at softening the impact of the global financial crisis. This year, China has capped the size of outstanding local government debt at 18.8 trillion yuan ($2.73 trillion), up from the 17.2 trillion ceiling in 2016, excluding bonds issued under a debt swap scheme. At the end of last year, outstanding local government debt totalled 15.32 trillion yuan.