Daily Market News 1 Mar 2011

 

Market Movers Yesterday

CPI from the EU came out less than expectations MoM and YoY. This further helped sterling strengthen against the Euro however due to risk appetite the US dollar didn’t react accordingly.

Later on in the day US personal income showed an improved picture. Salaries rose by 0.6% in the States thus supporting gains in the stock markets.

Pending Home sales in the US came out 0.2% below expectations however the figure was still 0.4% better than December. If the excuse was seasonal trends in the housing market the overall picture from the US was still encouraging as Chicago Purchasing Managers Index captured a pleasant picture for businesses. The figure improved by 3.1 points.

 

Market Movers Today

Nationwide housing prices reported an increase of 0.5% MoM. This helped Sterling break the 1.63 barrier against the dollar. Considering the main reason to keep interest rates on hold is the depressed housing market, these figures could change the mood.  

German PMI manufacturing figures are looking to improve however any gains in the Euro may well be short lived as unemployment is expected to rise at the same time by 1.2%.

UK M4 Money supply is likely to show more sterling in circulation in the economy MoM but a similar picture as Germany may materialise as the UK manufacturing sector may well be running out of steam with a drop of 0.5points.

Unemployment rate in the euro zone is expected to stay at a 10% high. It wouldn’t come as a surprise depending on the outcome of German unemployment earlier on.

Federal Reserve Bernanke is expected to keep interest rate at record low. Therefore no dollar strength is expected on the back of his speech.

US ISM manufacturing is expected to come out slightly lower. This could add to further risk aversion alongside the Libyan unrest causing the US dollar to strengthen.