Daily Market Report 16/04/14


The Consumer Prices Index (CPI) grew by 1.6% in the year to March 2014, down from 1.7% in February. The largest contribution to the fall in the rate came from transport, particularly motor fuels. Other smaller downward effects came from the clothing and furniture & household goods sectors.

The output price index for goods produced by UK manufacturers (factory gate prices), rose 0.5% in the year to March, compared with a rise of 0.6% in the year to February also UK house prices increased by 9.1% in the year to February 2014, up from 6.8% in the year to January 2014 The Pound strengthen off the back of these figures early in the trading day as inflation was expected to be weaker.


In Germany Yesterday afternoon ZEW Indicator of economic sentiment - a monthly poll of investors and analysts - slipped for the fourth month in a row. After the latest fall of 3.4 points, it now stands at 43.2 points, which is still high against the historical average of 24.6 points. Analysts said uncertainty caused by the Ukraine conflict was making investors more cautious

The Eurozone trade surplus rose to €13.6 billion surplus in February, compared with €9.8 billion- surplus in the same period last year. EU's seasonally adjusted exports rose by 0.9% while imports fell by 0.5% compared with January. The Eurozone’s strong trade surplus is one of the fundamental reasons the euro currency has held its value amidst challenging economic conditions.


The U.S. March consumer price report showed slightly higher-than-expected monthly numbers coming in at 0.2% increase in March and 1.5% year on year, largely off the back of increased food prices, airfares and alcohol. This is well below the annual inflation figure if 2% that the Federal Reserve are targeting. The Dollar did not move off the back off these inflation figures.


Overnight we had mixed data form China, the world’s second largest economy with Q1 GDP figures released in line with expectations at 1.4% while industrial production was slightly lower and retail sales up at 12.2%. This pushed up the higher yielding currencies such as the Australian and New Zealand dollars.

This morning we have unemployment figures in the UK expected to come in at 7.1% as well as earnings growth figures. Then we have Eurozone inflation figures, expected to fall to 0.5% in March and could put the Euro under pressure. In the afternoon we have US mortgage applications and building permits for March.

Key Announcements:

9.30am – GBP – Unemployment Rate (Feb): Expected to fall to 7.1%.

10.00am – EUR – Consumer Price Index (Mar): Expected to fall to 0.5%.

13.30pm – USD – Building Permits (Mar): Expected to fall to 995,000.

13.30pm – USD – Housing Starts (Mar): Expected to rise to 968,000.

15.00pm – CAD – BoC Interest Rate Decision: Expected to remain at 1%.