Daily Market Report - 31/03/2015

Yesterday Greece's biggest creditor Germany said that the euro zone would give Athens no further financial aid until it has a more detailed list of reforms and some are enacted into law, adding to scepticism over plans presented by Greece last week. Chancellor Angela Merkel said Athens had some degree of flexibility on what reforms to implement but that they must  satisfy their European partners. There was no immediate reaction from the Greek government on whether the list would be amended further, with reports suggesting it could take several more days before a proper list was ready.

Due to the uncertainty over Greece's financial situation Greek bond yields rose yesterday. The yield  on 10-year Greek debt inched up to 11.11%, from 11.04%. Also Greece’s two-year bond yields has risen from 20.4% to 20.8%, implying an even higher risk of default.

Data revealed yesterday showing that  European economic sentiment jumped in March. A third successive rise in overall Eurozone economic sentiment to a 44-month high in March indicates that a more favourable growth environment in the Eurozone is increasingly being fostered by the much more competitive euro, low oil prices and major ECB stimulus. The Commission’s economic sentiment index jumped to 103.9 this month, beating expectations. This continues the upward trend observed since the beginning of 2015.

Inflation rebounded in Germany last month. Annual inflation was up 0.1% in March, up from minus 0.1% in February and minus 0.5% in January. However, some economists have warned it could fall back into negative territory with energy prices expected to stay low throughout this year.

Consumer confidence has soared to a 13-year high in March with expectations Britain’s are preparing to spend their cash over the Easter weekend. Gfk’s consumer confidence index rose 3 points to a score of plus 4 in March compared to the previous month. The index takes into consideration five areas to track consumer confidence, with all areas more upbeat. The major purchase index was the biggest riser, up 5 points, indicating consumers were more willing to make a major purchase than they were last year.

Key Announcements
GBP - 09:30: UK GDP (MoM) expected to fall from 0.7% to 0.5%
EUR - 10:00: European Consumer Price index (YoY) expected to rise from -0.1% from 0.3% 

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