Daily Market News 24 Mar 2011

 

Market Movers Yesterday

• The first piece of data out from the UK yesterday was the BOE minutes. The vote came in at 6-3. Many investors were positioned for a hawkish set of minutes with another member joining Weale, Sentance and Dale for a rate rise. This did not materialise however and we saw sterling slip and continue to do so for the remainder of the day. For a rate rise to occur we will now need 2 members to change their votes, which is unlikely and therefore GBP suffered.

• The most important information for the day was the UK budget and we saw sterling continue on its bearish pattern. The main reason GBP dropped was because they announced they will be purchasing a range of high quality assets which is essentially the equivalent of QE. Osborne also expects unemployment to peak this year and he expects inflation to be back at 2.5% by next.

• Portugal is still the main worry for the Eurozone and it could still be pushed into the hands of the IMF and EU to bail them out.  Last night Prime Minister Jose Socrates submitted his resignation as the current government rejected his austerity measures. This saw the Euro weaken off to 1.1541. (GBP/EUR)

• We saw a return to risk aversion in the market as US new home sales plunged by 16.9%. The number of units sold is the lowest ever and obviously prices came down with that. The housing market continues to be the weakest part of the US economy and whilst the Labour market is still down there is little hope of a meaningful recovery.

• Finally in other news it is looking likely that the BOJ will intervene again to weaken the Yen.

Market Movers Today

•  In the US could see further risk aversion as bad figures are expected out from the durable goods orders and continuing Jobless claims. As stated above whilst the labour market remains negative in the US there is little hope of a speedy recovery.

• In the Euro zone today we have the release of PPI for both Germany and the Euro zone as a whole. These figures across the board are expected to come in lower and this paired with the continuing debt crisis we could see the Euro come off a bit.

• In the UK we have Retail Sales figures being released which are expected to be down from last months. This is not uncommon for this part of the year as people are still counting the cost of Christmas.