Daily Market Report 03/04/14


House prices have continued to rise according to a report by Nationwide. Year on Year, the rise in house prices hit 9.5% up from 9.4%. However, the London market is soaring further, with prices up 18% for the whole year, just under double the national average and are now 20% above their pre-crisis peak.

Confidence among UK construction firms has hit the highest level in over seven years, as house builders continue to drive strong growth in the sector. Markit's monthly construction PMI survey, just released, showed that confidence about the 12-month outlook hits highest level since January 2007.


The producer price index (alternative measure of inflation) declined at its fasted rate in more than three years in the 12 months to February, falling 1.7%. However without the large reduction in domestic energy prices the decline would have only been 0.5%

European Central Bank Vice President Vitor Constancio has said the euro area will probably avoid outright deflation as a “soft” economic recovery gradually reduces spare capacity in the economy,


In the USA mortgage application for March continued to fall, declining 1.2% compared to 3.5% in February. Also ADP employment figures disappointed, coming in below expectations at 191,000 against a forecast of 195,000, however this is still an improvement on the previous month’s figures of 178,000


Service sector figures from the Eurozone and the UK marginally disappointed showing a slight slowdown in output.

The UK figures are still fairly robust despite hitting a 9 month low and the outlook for the sector, which makes up a large proportion of the UK economy still remains fairly positive. The pound has weakened very marginally following the data.

Main focus will be on the inflation report from the ECB where Mario Draghi will clarify his stance inflation which could mean the markets become volatile around that time.

Key Announcements:

12.45pm –EUR – ECB Interest Rate Decision: Expected to remain at 0.25%.

13.30pm – EUR – ECB Monetary Policy Statement.

13.30pm – USD – Initial Jobless Claims: Expected to rise to 317,000.

13.30pm – USD – Continuing Jobless Claims: Expected to rise to 2.84mn.

15.00pm – USD – ISM Non-Manufacturing PMI (Mar): Expected to expand further to 53.5.