27.03.15 Friday Morning

US
It was an odd week for the markets, and it was no different in the US. The Dow’s dollar woes continued in fits and starts, with a slight growth in inflation boosted the greenback; however, the dollar spent much of the week flitting between losses and gains against the pound and the euro, and whilst it is still strong, the currency isn’t looking as stable as it did a few weeks ago.

Elsewhere, strong manufacturing PMI was countered by very weak durable goods orders , with this latter figure setting off huge declines that infected the entire market; even a 5 week low for unemployment claims failed to cause a turnaround, with the Dow Jones only just managing to stall its losses by Thursday evening.

Looking ahead to next week, its non-farm employment time! Discussion over that figure is likely to dominate the conversation for much of the week, especially with a Europe-wide bank holiday next Friday.

UK
For much of the week the FTSE managed to hold onto its record-breaking post-7000 levels; however, it was dragged down by the US markets on Wednesday, and looks set to end the week with that figure a distant memory. Data-wise, the UK saw very poor industrial order expectations, whilst CPI fell to 0 for the first time since the inflation measurement was implemented in 1989. Further inflation comments from key BoE members suggests that inflation could turn negative next month, with a fresh rate cut on the cards if the downward trend persists.

Next week sees new GDP and current account data, alongside manufacturing and construction PMI and Halifax HPI. What will be more interesting is how the pound continues to performance as the election race heats up. With April designated as the official ‘campaign season’, sterling could begin to see more instability after an already unstable week.

Europe
The Eurozone’s focus once again fell on Greece and Germany at the start of the week, with a meeting between Tsipras and Merkel appearing to thaw the frosty relations between the two countries. Greece is set to present more reforms next week in order to unlock more, much needed, stimulus, so investors can fully expect all eyes to be on Athens to see if this issue can be resolved.

Like the FTSE, the Eurozone indices were led into precipitous declines for much of Wednesday and Thursday, despite composite PMI for the region nearing 4 year highs, with a 13 year high for German consumer confidence and the fastest money supply rise in 6 years. However, unlike the FTSE and the US markets, the Eurozone managed to turnaround these declines to see minor gains, even if it does look set to end the week on a limp note.

Greece will likely dominate next week as they try and appease their creditors; elsewhere, German retail sales, preliminary CPI and unemployment change, French consumer spending, region-wide CPI flash estimates and an ECB monetary policy meetings account should provide the side dishes to a Greek main course.

Commodities
Brent Crude had a busy week, enduring another high US oil inventories order as US oil producers rapidly run out of storage space. However, air strikes in Yemen, and the promise of more Middle-East stability, pushed the commodity near $60 per barrel; by Friday this had faded, and Brent Crude fell back to below $58 per barrel. This, nevertheless, leaves the commodity in a better position than it was at the start of the week; as ever, it remains to be seen how long it can last.

Gold managed to surge above $1200 per ounce for the first time since the start of March after a weak dollar performance on Thursday, only for this growth to disappear by Friday as the greenback got its mojo back. Similarly, copper saw 7.5% growth on Monday off of weak dollar, but was hit by disappointing Chinese manufacturing data. The metal had managed to regain its confidence and push to $2.85 per pound as oil rose, but like its commodity siblings, this positivity had slipped away by Friday.

Stock of the week: Kraft Foods Inc
The announcement of a Kraft/Heinz merger, in the process creating the 3rd largest food company in the USA, unsurprisingly saw big gains for the mac and cheese maker. After the merger was revealed, Kraft was pushed $20 higher to around $84 per share, even if the prospect of job cuts looms.

(Source: IT-Finance.com 27/03/2015)

Economic Diary, 30^th March to 3^rd April 2015

 

Monday 30^th March

All Day – EUR German Prelim CPI m/m

7.00am – EUR Spanish Flash CPI y/y

8.30am – GBP Net Lending to Individuals m/m

12.30pm – USD Core PCE Price Index m/m

12.30pm – USD Personal Spending m/m

2.00pm – USD Pending Home Sales m/m

11.15pm – USD FOMC Member Fischer Speaks

 

Tuesday 31^st March

1.30am – JPY Average Cash Earnings y/y

6.45am – EUR French Consumer Spending m/m

7.55am – EUR German Unemployment Change

8.30am – GBP Current Account

8.30am – GBP Final GDP q/q

9.00am – EUR CPI Flash Estimate y/y

9.00am – EUR Unemployment Rate

1.45pm – USD Chicago PMI

2.00pm – USD CB Consumer Confidence

 

Wednesday 1^st April

1.00am – CNY Manufacturing PMI

1.45am – CNY HSBC Final Manufacturing PMI

7.15am – EUR Spanish Manufacturing PMI

7.45am – EUR Italian Manufacturing PMI

8.30am – GBP Manufacturing PMI

12.15pm – USD ADP Non-Farm Employment Change

2.00pm – USD ISM Manufacturing PMI

2.30pm – USD Crude Oil Inventories

 

Thursday 2^nd April

8.30am – GBP Construction PMI

11.30am – ECB Monetary Policy Meeting Accounts

12.30pm – USD Trade Balance

12.30pm – USD Unemployment Claims

2.00pm – USD Factory Orders m/m

 

Friday 3^rd April

1.45am – CNY HSBC Services PMI

12.30pm – USD Non-farm Employment Change

12.30pm – USD Unemployment Rate

12.30pm – USD Average Hourly Earnings m/m

 

Earnings releases, 30^th March to 3^rd April 2015

 

Monday 30^th March

Compass Group PLC – Pre-Close Trading Statement

Central Asia Metals PLC – Full Year 2014 Earnings Release

James Halstead PLC – Half Year 2015 Earnings Release

 

Tuesday 31^st March

Kingfisher PLC – Full Year 2014 Earnings Release

MITIE Group PLC – Pre-Close Trading Statement

 

Wednesday 1^st April

Firstgroup PLC – Pre-Close Trading Statement

Titan Pharmaceuticals Inc – Q4 2014 Earnings Release

 

Thursday 2^nd April

Dunelm Group PLC – Q3 2015 Earnings Release

Booker Group PLC – Q4 2014 Interim Management Statement