02.04.15 Thursday Morning

UK
It has been a hectic week on the markets, despite an abbreviated trading week due to the Easter weekend. The UK general election campaign began in earnest this week with the dissolution of Parliament, and at times you could sense the looming uncertainty on the FTSE, which in its more quiet moments slipped into losses. On Monday and Wednesday the FTSE performed strongly, with a combination of an 8 month high in manufacturing PMI (despite weak productivity figures), a 12 year high in consumer confidence and an upward revision in fourth quarter GDP all helping the UK index to post strong gains.

However, it is still looking like it will end the week at a loss due to a sell-off on Tuesday that sank the FTSE by 2% and left it spending the end of the week playing catch up. The Easter weekend will delay the FTSE’s reaction to the US non-farm figures on Friday, with any impact likely not felt until the markets open back up on Tuesday. Once things restart, the big items will be the UK services PMI, the (almost non-existent) chance of change in the BoE interest rates and more manufacturing data.

US
The US markets saw big gains on Monday; however these were wiped out as weak Chicago PMI alongside declines in Europe prompted the Dow Jones et al. to plummet on Tuesday afternoon. Things were exacerbated on Wednesday, as a disappointing ADP non-farm figure signalled a potentially poor result on Friday and prevented the US markets from recovering their losses in the way their European peers did. The continued strength of the US dollar, the ever-complicating factor in America’s recent trading landscape, and the failure to secure a nuclear deal with Iran merely piled onto the bad news, creating a poor quarterly transition for the US markets.

Much to the chagrin of European traders, the US announces its official non-farm employment change figures on Friday into a relative void with many of the markets closed for Easter. It remains to be seen which way the US markets will turn due to the complex logic surrounding whether strong jobs data is good for the US markets, as the boost it gives to Fed hawks will only strengthen the dollar, the positives of which investors continue to be undecided over. Turning to next week proper, the US sees ISM non-manufacturing data and JOLTS job opening figures alongside further unemployment claims.

Europe
The Eurozone largely followed the same, if less extreme, trends as the FTSE, with gains on Monday and Wednesday hurt by a disappointing Tuesday. Weaknesses in the region-wide unemployment rate and core inflation negated strong overall inflation and led the Eurozone indices lower. However, a wave of impressive manufacturing data, which culminated in a 10-month high for the region-wide figure, boosted the indices on Wednesday, leaving to an almost flat week for the Eurozone. 

However, frustratingly the Greek issue remains unresolved, with increasingly little time left on the clock before the country’s situation gets a lot, lot worse. Talks at the start of the week yielded little in the way of progress, and a fresh reforms package submitted on Wednesday looks like it will fall short once again. This issue is likely to dominate the region next week, and will be complimented by region-wide retail sales, German inflation figures, French production figures and a flurry of services PMIs.

Commodities
Brent Crude spent the week relatively stable about $55 per barrel, not really diverging from this level. It saw some, surprisingly, gains after the latest US crude oil inventories came in at around 4.8 million barrels, just over half of the previous week’s figure. However, with the international powers pushing for a nuclear deal with Iran that would likely come with the lifting of sanctions, the commodity could be about to see a fresh influx of oil into the market, something that would play havoc with its current price.

Gold managed to crawl back over the $1200 per ounce level, as the dollar flitted between losses and gains for much of the week; as ever, the main barometer for its performance will be the strength of the dollar once we return from the Easter break. For copper the week was relatively disappointing, slipping to $2.74 per pound even with better-than-expected Chinese manufacturing data. 

Stock of the week: Marks & Spencer Group PLC
Marks & Spencer, the much beleaguered British brand, finally managed to give its investors some non-food related good news. It is perhaps a sign of how bad things have been for M&S of late that merely announcing that its general merchandise rose 0.7% year on year in its fiscal fourth quarter, the first non-fall in 15 consecutive quarters, is such a cause for celebration. Yet investors were incredibly happy with this marginal turnaround, pushing the stock higher despite growing issues in the company’s international trade due to the ongoing problems in Russia, Ukraine and Turkey.

Make sure to check out Spreadex's Easter Weekend trading hours!

(Source: IT-Finance.com 02/04/2015)

Economic Diary, 6^th to 10^th April 2015

 

Monday 6^th April

8.00am – EUR Spanish Unemployment Change

3.00pm – USD ISM Non-Manufacturing PMI

 

Tuesday 7^th April

8.15am – EUR Spanish Services PMI

8.45am – EUR Italian Services PMI

9.00am – EUR Services PMI

9.30am – GBP Services PMI

3.00pm – USD JOLT Job Openings

 

Wednesday 8^th April

12.50am – JPY Current Account

7.00am – EUR German Factory Orders m/m

9.30am – GBP BoE Credit Conditions Survey

10.00am – EUR Retail Sales m/m

2.30pm – USD FOMC Member Dudley Speaks

3.30pm – USD Crude Oil Inventories

7.00pm – USD FOMC Meeting Minutes

 

Thursday 9^th April

12.00pm – GBP Official Bank Rate

1.30pm – USD Unemployment Claims

 

Friday 10^th April

2.30am – CNY CPI y/y

2.30am – CNY PPI y/y

7.00am – EUR German Final CPI m/m

9.30am – GBP Manufacturing Production m/m

1.30pm – USD FOMC Member Lacker Speaks

1.30pm – USD Import Prices m/m

3.00pm – GBP NIESR GDP Estimate

 

Earnings releases, 6^th to 10^th April 2015

 

Monday 6^th April

N/A

 

Tuesday 7^th April

N/A

 

Wednesday 8^th April

Afren PLC – Trading Statement

Quindell PLC – Full year 2014 Earnings Release

 

Thursday 9^th April

Gulf Keystone Petroleum PLC – Full Year 2014 Earnings Release

Walgreens Boots Alliance Inc – Q2 2015 Earnings Release

 

Friday 10^th April

Huntsworth PLC – Preliminary Results