Daily Market Report - 16/03/2015

Wholesale prices in the U.S. unexpectedly declined in February for a fourth consecutive month, reflecting cheaper food and a slump in profit margins among wholesalers and retailers. The 0.5 percent decrease in the producer price index followed a 0.8 percent drop the prior month. Inflation in the U.S. has decelerated as a rising dollar cheapened the cost of imports and crude oil slumped. Federal Reserve policymakers are awaiting signs that inflation will move back up toward their target as they consider raising interest rates for the first time since 2006. 

Compared with a year before, producer prices fell 0.6 percent, the first 12-month decrease since records began in 2009. The core index increased 1 percent in the 12 months ended February, after a 1.6 percent gain. 

Consumer confidence declined in March to a four-month low as optimism about the U.S. economy was tempered by weaker income expectations and a rebound in gasoline prices. The University of Michigan said Friday its preliminary consumer sentiment index decreased to 91.2 this month from 95.4 in February.  Consumers were less upbeat this month as cold weather boosted utility bills, the cost of gas climbed from the almost six-year low in January and wage growth was limited among middle- and lower-income households. At the same time, a better job market is among reasons Americans may feel comfortable sustaining a steady pace of spending. 

US household budgets were strained this month by higher home-heating bills. The eastern U.S. saw below-normal temperatures from Atlanta to New York and record snowfalls in New England. The National Oceanic and Atmospheric Administration’s data showed February was the snowiest month on record for Boston, while record-low temperatures for any February were recorded in Chicago, Buffalo and Cleveland. 

British construction output unexpectedly fell in January at the sharpest monthly rate since late 2013, dragged down by a worsening decline in housebuilding. Construction output shrank by 2.6 percent in January after rising by 0.6 percent in December, the Office for National Statistics said. Total new housebuilding dropped by 5.0 percent on the month, the steepest fall since February last year. While most signs points to a strong start to the year for Britain's economy, construction output has disappointed.

Key Announcements:
USD –13:15: US Industrial Production (Feb) expected to remain unchanged at 0.2% 
EUR –18:45: ECB President Mario Draghi makes a speech

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