Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
In pre-opening, European markets were trading on a downward path. The focus will be on the currency market, after the Dollar has appreciated in the last hours, as well as on the economic indicators that will be presented on both sides of the Atlantic. Inflation in the Eurozone will be published today in March, which is expected to reflect a decline after rising to 2% in the previous month. Yesterday the levels of inflation were known for Spain and Germany, which showed a deceleration of prices. Governor of the Bank of France, Villeroy de Galhau, said this week that the acceleration of inflation is not enough to remove Quantitative Easing and added that ECB policy will continue to evolve according to economic circumstances.
The US market closed higher, helped by the behavior of the financial and energy sectors and the release of GDP in the fourth quarter, which confirmed a deceleration at the end of 2016, compared to the third quarter, although less pronounced than previously estimated. According to the 3rd estimate, in the last quarter of last year, the economy of the country showed an expansion of 2.10%, after 3.50% in the third quarter, but compared to the previously advanced 1.90% and the estimated 2%. The main cause for the slowdown in GDP was the drop in exports and federal spending, as well as an acceleration in imports. It was also confirmed that in 2016 the economic growth was 1.60%, the worst performance since 2011 and after the 2.60% observed in 2015. The consumption growth, which represents more than two thirds of economic activity, has been revised from the previous 3 % To the 3.50%. GDP-related inflation hit 2.10%, up from 2% expected by economists. The number of weekly applications for unemployment benefits has decreased by 3000 to 258 000, thus maintaining the longest series since 1970 from a level of this indicator below 300 000. Much of the attention during today’s session will fall on the Economic agenda that is quite fulfilled. Accordingly, household expenditure is expected to show a modest monthly change (0.20%), after retail sales increased slightly (0.10%) and services were affected by declining demand in the sector Of utilities. In turn, the family income should have increased 0.40%, favored by the solid increase of salaries. Today’s agenda also forecasts the publication of inflation associated with household consumption. This indicator should have stood at 2.10% in annual terms. In addition, the consumer confidence index measured by the University of Michigan and the Chicago PMI economic activity index will be released.
Asian markets traded in different directions. Investors reacted to published economic indicators and were somewhat anxious about the meeting of President Donald Trump and Xi Jinping, Secretary General of the Communist Party of China, scheduled for next week. In Japan, the consumer price index rose 0.20% in February from the same month last year, which represents the fastest pace in almost two years. However, household consumption decreased by 3.80%, below the estimated 1.70% decline. In China, the PMI for the manufacturing sector rose to 51.80 in March, compared to 51.60 in February. The service PMI stood at 55.10, compared with 54.20