New car sales still strong with fresh jump in March

Australia: 

Sales of new motor vehicles remain at historically high levels, with a 2.2% increase in March. It was the largest monthly increase since September 2015. 

Over the year to March, new motor vehicle sales rose 4.2%. New motor vehicle sales for the year to March hit a record annual tally of 1,166,180, building on a record year in 2015.

Share Markets:

The Dow closed above 18,000 for the first time since July last year. Ongoing low interest rates and reasonable company earnings reports lifted the market.

The Dow was up 0.6% and the S&P500 rose 0.7%. European markets were also up. The FTSE rose 0.2% and the German Dax was up 0.7%.

Interest Rates: 

Yields rose marginally in the US overnight as Fed member William Dudley expressed the view that US inflation would return to the Fed's 2% target as transitory forces that have held inflation down slowly dissipate.

Dudley said US economic news was mostly positive, but reiterated that monetary policy adjustments will be gradual and cautious.

US 10 year government bond yields were up 2 basis points to 1.71% while2 year yields were up just 1 basis point to 0.74%.

In Australia, government bond yields were a touch lower with 3 year yields down 5 basis points to 1.93%.

Foreign Exchange:

The US dollar index was lower overnight and continued Friday's weakness.  This saw the euro and the AUD pick up.

The AUD is at its highest against the USD since June last year assisted by recently firmer prices for iron ore and oil as well as the outlook for US interest rates.

Commodities:

The price of West Texas light crude oil slipped a little lower while Brent oil edged a touch higher.

Lack of agreement on supply reduction weighed on prices as did supply disruption in Kuwait as oil workers went on strike.

Copper rose marginally and gold was essentially unchanged. The price of iron ore pushed back above $US60 per tonne.

China:

Average prices for new homes rose 4.9% in the year to March for 70 major capital cities.

This was the fastest pace of growth in nearly two years and up from 3.6% price growth in the year to February. 

Since March, authorities tightened regulations for property purchases in Shanghai and Shenzhen, which will impact April's data.

Europe:

No major data released.

New Zealand:

CPI inflation rose 0.2% in Q1.  For the year to the first quarter, CPI rose 0.4%, up from 0.1% in the year to Q4. It remains well below the Reserve Bank of New Zealand's inflation target range of 1 to 3 percent.

United States: 

The NAHB homebuilder sentiment index remained unchanged at 58 for a third straight month. Although holding well above 50, it is off its October 2015 cycle peak of 65.



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