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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).

 

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IndexActual priceWeek to dateMonth to dateYear to date
S&P 5002008.90.44.0-1.7
Eurostoxx 600341.2-0.22.2-6.7
Nikkei16938.9-0.45.7-11.0
MSCI Emerging Markets790.70/06.8-0.4
FTSE 1006130.15-1.120.54-1.8
Treasury yield 10 years1.960.090.23-0.31
Bond yield 10 years0.270.040.17-0.36
Gilt yield 10 years1.570.080.23-0.39
USD vs Sterling1.4370.993.26-2.48
Sterling vs Euro0.776-0.370.67-5.03
USD vs Emerging Markets FX66.8970.733.171.92
Commodity Index173.53.06.3-1.5
Gold1257.4-0.11.518.5
Brent Oil40.64.812.88.9

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