Yesterday’s market movers
- In Europe we had German PPI figures for manufacturing which came out slightly better. As well as this the Employment data was also positive. The Unemployment rate dropped to 7.4% in February.
- The EMU CPI figure came in as expected which proved that Markets are getting cautious ahead of the ECB rate decision on Thursday as we may see an increase in interest rates. It shows for the third consecutive month in the row inflation is above target signaling a rate hike sometime this year. The Euro stayed strong on the back of this information trading in the 1.38 levels for most of the day.
- In the UK we had the M4 Money supply (MoM) and (YoY). The monthly figure came out better than expected and the yearly figure came out worse than expected. This had little effect on the markets. More importantly Net leading to individuals on the month improved and UK mortgage approvals increased from the start of the year signaling momentum in lending and the housing market improvements.
- In the US there was the ISM manufacturing index which increased at the fastest pace for 7 years which delivered positive news for the US economy.
- The Federal reserve chairman Ben Bernanke made comments about the US economy last night. He discussed the oil prices are not concerning enough to halt recovery. QE is supposed to continue until it is finished in June. Although the inflation in the US is relatively low, if the commodity prices continuously increase the inflation might also be pushed up. Hence the Fed will pay more attention to the prices. At the same time he said to solve the deficit problem is the priority for the monetary policy in the long term.
Today’s market movers
- There is no market data from Europe today.
- In the UK we have the PMI construction for February which is expected slightly lower, this could show a drop in the construction sector, however because the figures is going to be above 50 it will probably have a little affect on the market.
- In the US we have the ADP employment change which is expected worse than previous. The US Dollar may strengthen on the back of this information as from past experience we have noticed it having a direct correlation with the Non-farm payroll released on Friday.