Financial markets review – 11 March 2016

Monday 7 March

• US February labour market conditions index fell 1.6 points last month to -2.4, below market expectations (+1.0 expected), this is the lowest level since June 2009. US consumer credit had the lowest rise in January since May 2012 ($10.5bn vs $17.0bn expected).
• Germany factory orders declined by less than expected in January (-0.1% month on month (MoM) vs -0.3% expected).
• During the annual National People Congress meeting, the Chinese Prime Minister announced that the GDP growth target for 2016 is 6.5%- 7%, with 6.5% also being set as the baseline rate through to 2020. China also reported disappointing export data which shows a year on year (YoY) declined of 25%.
• Japan Q4 GDP figures shows a YoY change of -1.1% which beat the expectations of -1.5%.
• Iron Ore price jumped by 25% during the day, due to potential strong demand from China.

Tuesday 8 March

• Germany industrial production improvement in January was higher than expected +3.3% MoM (+0.5% expected) with the December reading revised up 0.9%.
• There was no change in the second revision of Q4 GDP for the Euro area (+0.3% quarter on quarter (QoQ)). The YoY GDP in the Eurozone was 1.6% compared to a forecast of 1.5%.
• Japanese household confidence in February printed 40.1, the previous month was 42.5. This is also lower than the expectation of 42.3.

Wednesday 9 March

• US January wholesale inventories report saw an unexpected +0.3% MoM rise, after expectations had been a – 0.2% decline. Trade sales were much weaker than expected during the month (-1.3% MoM vs -0.3% expected).
• UK January industrial production data modestly undershot expectations with a +0.3% MoM rise (+0.5% expected), although manufacturing production was markedly better than the consensus (+0.7% MoM vs +0.2% expected).
• Japan reported strong Foreign Bonds Buying of 1,538 Billion, compared to last year’s figure of 932 Billion.
• China shows a higher than expected February CPI of 2.3% (YoY) vs an estimate of 1.9%.

Thursday 10 March

• The German trade balance in January of 18.9 Billion was disappointing compared to the forecast of 19.6 Billion, mainly due to a lower than expected export data (-0.5% drop vs forecast of 0.5% gain).
• South Africa reported a significant jump in YoY change in gold production (January stats) of 27%, vs a projected decline of 3.1%, highlighting high global demand of gold. However, manufacturing production was a disappointing decline of 1.8% MoM compared to an expected gain of 0.1%.
• Brazil revealed worse than expected January retail sales figure of -10.3% YoY vs an expectation of -8.4%.
• ECB announced monetary policy decisions: the main refinancing rate will be cut by 5 basis point to 0.00%; the interest rate on marginal lending facility will be cut by 5 basis point to 0.25%, the deposit rate will be cut by 10 basis points to -0.40%; monthly purchases under the asset purchasing programme will be expanded to €80 billion a month, and investment grade euro-denominated bonds issued by non-bank corporations in Euro area will be eligible for regular purchase.

Friday 11 March

• German inflation in February remains stable at 0.4% monthly, in line with expectations. The CPI growth in Spain was slightly disappointing, which printed -0.4% (vs -0.3% expected);
• Britain trade balance improved to -10.29 billion of pounds (vs -10.30 expected). The strongest improvement came from the rise of the trade balance, excluding European Union countries (-2.2 billion vs -2.9 expected).