Financial markets review – 8th April 2016

Monday 4 April

• US factory orders for February have declined 1.7% MoM as expected, core durable goods orders were also down by 3.0% MoM. Labour market conditions index falls by -2.1pts in March after expectations had been for a +1.5pts gain. That means the index has now put in its third consecutive monthly decline which is in contrast to the more positive picture that the headline nonfarm payrolls data is painting.
• More positive comments from Feb officials as Boston Fed’s President Rosengren notes that in his opinion the current market expectations for one rate increase this year and next ‘could prove too pessimistic’.
• The Euro area unemployment rate is as expected at 10.3% in February, while the latest Sentix investor confidence reading showed a smaller than expected 0.2pt gain this month to 5.7 (vs. 7.0 expected). The Euro chopped around in small range.

Tuesday 5 April

• The final March PMI revisions is revised down 0.6pts to 53.1 after the services number fell to its softest since January 2015. Euro area composite PMI points to GDP growth of around 0.4% QoQ in Q1, which is in line with expectation.
• Germany has softer than expected February factory orders where orders were unexpectedly down -1.2% MoM in the month (vs. +0.3% expected).
• In the US, the ISM non-manufacturing reading strengthens after rising 1.1pts in March to a slightly higher than expected 54.5 (vs. 54.2 expected).
• US February trade balance reading revealed a slightly wider than expected deficit in the month ($47.1bn from $45.9bn).

Wednesday 6 April 

• Pfizer announce that it will terminate the proposed $150bn mega-merger with Allergan.
• Fed released the FOMC meeting notes for March policy meeting, which reinforced the fact that the Fed is clearly looking at both domestic and global economic and financial conditions.
• US crude oil inventories show a drop of 5m barrel, compared to a 3.2m barrel increase expected, this has been received positively in the oil market.

Thursday 7 April

• In Europe, the only highlight today was France’s trade balance in Feb which shows a worse than expected deficit of EUR 5.2bn, compare to an expected drop of EUR 3.8bn.
• ECB released meeting notes for the March policy meeting, which reveals a large degree of divergence between member’s opinions on the rate cuts.
• UK house price index (MoM) shows a higher than expected gain of 2.6% vs (0.7%).

Friday 8 April

• UK manufacturing production for February shows a MoM change of -1.1%, which is worse than -0.2% expected.
• UK trade balance for February also came in below expectation, showing a deficit of 12bn, compare to 10.2bn expected.
• In Europe, German trade balance in February show improve from last month (19.8bn vs 18.7bn), also beating the expectation of 18.5bn.