What Is Important in the Financial World (4/9/2013)

China released inflation data for March, and the numbers received mixed reviews. One set of analysts believes that a lack of price increases will give consumers and businesses more purchasing power. In other words, rapidly rising prices rob purchasing leverage from the economy. On the other hand, another set of experts argues that low inflation means a flat economy. Sharp improvements in gross domestic product always trigger demands for goods and services. Inflation, according to this position, is a yardstick for expansion. Either way, China’s consumer purchasing index rose an extremely modest 2.1% last month.

According to a CNBC interview:

“The economic rebound China has experienced over the last few months should have brought about greater inflationary pressure. But, both CPI [consumer price index] and PPI [producer price index] readings for March point to subdued inflation. Indeed, that is another indicator that the recovery is not yet completely secured,” wrote Alistair Thornton, senior China economist at HIS, which provides economic and financial analysis.

Best-Selling Ford Vehicles

Ford Motor Co. (NYSE: F) announced that its Focus was the best-selling car in the world last year, at least based on data from research firm Polk. What Ford passed on disclosing is whether the car makes money, which would seem to be an even more important measure. No matter. Ford also said its F-150 pick-up was the third best-selling vehicle worldwide, and Fiesta was the best-selling subcompact. The Ford public relations department reported:

Sales of the compact Focus totaled 1,020,410 cars worldwide according to the automotive data and trends forecasting leader. Market gains for Focus were driven by consumer demand in China and the United States. China registrations were up 51 percent last year, with the market responsible for just more than one out of four Focus vehicles sold globally according to Polk vehicle registration data.

Despite the good news from China, Ford sales still trail those of General Motors Co. (NYSE: GM) and Volkswagen by a wide margin.

Portugal Austerity Warning

After a battle between Portugal’s top court and its central government over the constitutionality of certain austerity measures, the prime minister says he will pursue any legal means he can to cut deficits. This, and this alone, will give him near-term access to bailout funds he needs to keep his nation solvent. As the next series of austerity cuts begins, Portugal’s weary citizens were told to brace themselves again. According to The New York Times:

On Sunday, Prime Minister Pedro Passos Coelho warned his citizens to prepare for more hardship as his government would impose deeper spending cuts in areas like health and education to compensate for some austerity measures struck down by the country’s constitutional court.

While Mr. Passos Coelho’s determination to stick to the austerity script won immediate praise from Brussels, creditors are due back in Lisbon in coming weeks to assess just how far Portugal’s budgetary planning has been derailed by the court ruling.