U.S. Consumer Confidence Jumps Beyond Expectations in April

The U.S. Conference Board's consumer confidence index surprised to the upside in April, marking its largest jump since November 2005. The index rose to a reading of 39.2 from March's upwardly revised 26.9 level. Economists had expected the survey to rise to 29.9 in April.

The present situation component rose to 23.7 from March's 21.9 reading, while the expectations component rose to 49.5 from 30.2 in March. One-year inflation expectations rose one-tenth to 5.9%. In June and July of 2008, the inflation index peaked at 7.5%.

Josh Heller, an economist at RBC Capital Economics, said Tuesday's climb in U.S. consumer confidence represents the "green shoots" of recovery to which Fed chief Ben Bernanke has been referring. He said the Fed will probably reveal renewed commitment to a low interest rate at the FOMC announcement Wednesday afternoon.

Pace of Decline in U.S. Home Prices Slows in February

The S&P Case-Shiller Home Price Index fell to a reading of 143.17 in February against expectations for a decline to 142.80. January's figure was revised down to 146.35 from an initial reading of 146.40.

The 20-city composite index posted a decline of 18.63%, slightly less than the 18.70% decline expected. The previous month's decline was revised to -19.00% from an initially reported 18.97% fall.

The three-month annualized rate of decline was 26.28% in February, compared to the -26.56% rate in January and the 24.71% fall in December. Cleveland led the way in February with a 5.0% month-over-month decline, followed by Phoenix, which recorded a 4.5% decline.

Richmond Fed Manufacturing Activity Continues to Improve

Manufacturing activity in the U.S. Mid-Atlantic states continued to improve in April, according to a report from the Richmond Federal Reserve. The headline manufacturing index surged to a reading of -9 in April, beating expectations for a -17 reading. The index stood at -20 in March, and -51 in February.

Shipments catapulted to a reading of -3 in April from -15, while the new orders component rose to -2 from a prior reading of -20. The employment index rose to -26 from -28. Capacity utilization ticked up to -13 in April from -14 in March, while the orders backlog rose to -15 from -37.

U.S. Weekly Chain Store Sales Continue to Fall

ICSC and Goldman Sachs reported that U.S. chain store sales declined an annual 1.7% in the week ending April 25 compared to the previous week's 0.1% contraction. On a week-over-week basis, sales decreased 0.7% following a 0.4% fall previously.

Meanwhile, the Johnson Redbook retail survey recorded a 1.6% rise in sales in the third week of April versus the same period in March, and a 0.7% year-over-year gain.

ECB's Bini-Smaghi Says Near-Zero Rates Hurt Money Markets

Near-zero interest rates could impair money market movements, European Central Bank Governing Council member Lorenzo Bini-Smaghi said in Geneva on Tuesday.

According to the central banker, "Bringing the main policy rate too close to zero would risk hampering the functioning of the money markets as it would reduce the incentives for interbank lending."

He also said any non-standard monetary policies for the euro zone would likely not resemble those used in the United States, given that quantitative easing requires interest rates to be near zero levels to work.

German Inflation Rises Slightly Less than Expected in April

Following the regional CPI figures out of the six largest "Länder" released throughout the morning, the Federal Statistical Office reported that German inflation accelerated to 0.7% year-over-year in April, up 0.2 percentage points from March's 0.5% print. Expectations had been for a slightly stronger reading of 0.8% for the period.

On a monthly basis, the consumer price index remained unchanged in April following March's 0.1% decline, despite expectations for a 0.1% rise. In EU harmonized terms, the inflation rate reached 0.7% in April, less than the 0.8% print expected, but up from March's 0.4% reading.

BOC's Carney Says Target Rate to Remain Low Through Mid-2010

Bank of Canada Governor Mark Carney said Tuesday that the central bank has taken the proper steps to boost the economy and reach its 2.0% inflation target.

Speaking to the House of Commons Standing Committee on Finance in Ottawa, he repeated that he intends to keep the target interest rate at 0.25% through mid-2010.

He also said he remains confident that there will be an economic recovery in Canada, and that the fall in rates throughout the yield curve should provide extra stimulus to the Canadian economy.

Canadian Exports Expected to Fall 22% This Year, Says EDC

Export Development Canada said Tuesday it expects Canada's exports to end the year down 22% before recovering in the second half of 2010.

After a dismal performance this year, the EDC forecasts exports will stage a 7.4% recovery in 2010.

As for overall Canadian GDP, EDC forecasts a 2% drop this year and 1.7% growth in 2010.

Number of Canadians Receiving Unemployment Benefits Surges in February

The number of Canadians receiving EI benefits rose 44,300, or 7.8%, from January, with the highest increases in Alberta, British Columbia, Ontario and Saskatchewan, according to a report from Statistics Canada. Since October 2008, the number of Canadians on EI has risen 21.9%, or by more than 610,000 people.

In Alberta, regular beneficiaries surged 27.3% in February compared to the previous month, and have soared nearly 68% from October 2008, Statistics Canada said. In Ontario, claims rose 7.8% in the month, and are now up 28.6% since October.

By Ernest Hoffman, This email address is being protected from spam bots, you need Javascript enabled to view it and Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it , with contributions from Megan Ainscow, This email address is being protected from spam bots, you need Javascript enabled to view it , Erik Kevin Franco, This email address is being protected from spam bots, you need Javascript enabled to view it and Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Sarah Sussman, This email address is being protected from spam bots, you need Javascript enabled to view it

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