A strong rebound for European equities

Thursday, March 05, 2015

German factory orders declined sharply by 3.9% in January compared to a strong increase of 4.2% in December, missing analysts’ expectations of a 1.0% drop. France’s ILO unemployment rate remained unchanged at 10.4% in Q4 2014 in line with expectations. Despite the modest economic data, the European equity markets opened higher this morning with the CAC, DAX, IBEX and London equity benchmark index gaining between 0.2% and 0.60% in early trade.

DAX index

DAX Index (Deutsche Boerse AG Ge 2015-03-05 09-01-42

The ECB and Bank of England report interest rate decisions today. Please note that the BoE’s main rate has been at its remarkable low of 0.5% since March 2009 and its QE asset purchase programme is at £375 bln. The ECB reported at its last meeting that it plans to maintain its current interest rate of 0.05% for the short-term while it considers expanding its asset purchase programme. The euro continues to remain under heavy pressure after trading around 1.1040 against the USD.

EURUSD remains under heavy pressure

EURUSD Curncy (EUR-USD X-RATE)   2015-03-05 09-03-22

Asian equity markets were fairly mixed overnight. The Hang Seng index continued its sharp downside momentum after retreating 272.34 points (-1.11%) towards 24,190 while the Nikkei index edged higher and climbed 0.26% above 18.750. Precious metals consolidate within the recent range as gold hovered around $1,200/ounce and silver traded sideways around $16.20.

Hang Seng Index

HSI Index (Hong Kong Hang Seng I 2015-03-05 09-02-42

The release of the weekly EIA oil inventories report was very bearish yesterday, showing a large build of 10.3 million barrels of crude oil inventories for the week ending 27th February against analysts’ estimates of a build of 3.8 million barrels. Brent front month futures extended declines and hovered around $60 per barrel while WTI front month futures traded around $51.50 per barrel.

   

Events for today:

 

0700

DE

Jan

Factory Orders

1200

UK

Mar

BoE Rate

1230

US

Feb

Challenger Layoffs

1245

EZ

Mar

ECB Rate

1330

US

Q4

NF Prod. & Labour Costs

1330

US

w/e

Jobless Claims

1500

US

Jan

Factory Orders

1530

US

w/e

EIA Nat Gas

 

All times UK Local Time

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