Positive economic news from the US, Germany and UK, BoC raises rates

US economic news yesterday was, on the whole, positive. From Reuters:

The Conference Board said its index of consumer sentiment rose to 109.6 in April, the highest since May 2002, from an upwardly revised 107.5 reading in March...

The National Association of Realtors said sales of existing U.S. homes rose to a 6.92 million-unit rate in March from February's downwardly revised 6.90 million pace, beating expectations of a rise to a 6.7-million unit pace.

The rise in total sales was driven by a 0.3 percent increase in single-family home sales. But inventories soared by 7.0 percent, leaving a record 3.19 million existing homes available for sale at the end of the month...

Two gauges of weekly U.S. chain store sales showed the third week in April proved more robust this year than last...

Separately, the Federal Reserve Bank of Richmond said its monthly manufacturing index dipped to 18 in April from 21 in March.

So was the news from Europe. In Germany, Bloomberg reports a rise in business confidence in April:

The Ifo institute's confidence index, based on a survey of 7,000 executives, rose to 105.9, the highest since April 1991, from 105.4 in March...

Ifo's gauge of business expectations declined to 105.5 from 105.7, while the measure of current business conditions advanced to 106.4, the highest since October 1991, from 105.1.

But inflation accelerated in April.

Inflation in Germany, Europe's largest economy, accelerated for the first time in seven months in April as oil and fuel costs rose, making an interest rate increase by the European Central Bank more likely.

The inflation rate increased to 2 percent from 1.8 percent in March, the Federal Statistics Office in Wiesbaden said today. Economists expected German inflation to accelerate to 1.9 percent, according to the median of 35 estimates in a Bloomberg New survey. From a month earlier, consumer prices gained 0.4 percent.

In the UK, Reuters reports that manufacturing demand is improving.

The Confederation of British Industry said its monthly manufacturing order books balance improved to -11 in April from -16 in March. That was the highest since February 2005, and much better than analysts' forecasts for a reading of -15.

And in Canada, the strong economy has pushed the central bank to raise interest rates.

The Bank of Canada hiked its key overnight interest rate on Tuesday for the sixth straight time, maintaining its bias toward further increases as it warned the economy may be growing a shade faster than desired.

The bank raised the rate by 25 basis points to 4 percent as expected, but cautioned it would monitor developments closely "in light of the cumulative increase in the policy interest rate since last September."