Daily Market Report 14/03/2014

CNY

A flurry of weaker than expected Chinese data point to a marked slowdown in the world’s second-largest economy at the start of the year. China’s industrial production rose 8.6% in the first two months from a year earlier, disappointing market expectations of a 9.5% increase. This marked the worst performance since April 2009

Consumer spending also appears to be running out of steam. Growth in retail sales was the slowest in three years, up 11.8% in January and February from a year earlier Analysts had pencilled in a 13.5% gain.

The Chinese Premier also warned that further large-scale corporate defaults were “unavoidable” Last week Chaori Solar, a Shanghai-based solar panel maker, became the first Chinese company to default on its domestic bonds. This has made global investors nervous and we have seen stock markets weaken and some flight to the safety of the US dollar.

GBP

In Britain, the number of mortgages granted to first-time buyers climbed 38% in January from a year ago, according to the Council of Mortgage Lenders. Between December and January, there was the usual seasonal dip the total number of loans for house purchase in January was down 16% compared to December, but up 30% on January 2013.

USD

Retail sales rose slightly more than expected last month, by 0.3%, ending two months of declines. Shoppers stayed at home during unusually cold weather with masses of snow at the turn of the year. Sales are expected to pick up further in coming months as warmer temperatures and better household finances lure consumers back into the shops

There was more good news as the number of Americans filing new claims for unemployment benefits fell to a three-month low last week. Jobless claims dropped 9,000 to a seasonally adjusted 315,000 – the lowest reading since late November.

Today

We have just had German inflation figures released coming in as expected at 1.2%. At 9.30am we have The UK trade balance for January, expected to be show an increased deficit of £8.7bn. Later on in the evening we have US producer price index for February expected to remain unchanged and then at 2pm we have consumer sentiment for March that is expected to be more optimistic than in February. 

Key Announcements: 

13.55pm – USD – Reuters Michigan Consumer Sentiment Index (Mar): Expected to rise to 82.0