UK inflation surprisingly slowed to 4% in March, down from February’s 28-month high of 4.4%. Food prices, which dropped by a record 1.4% from February to March, were largely cited for the decline. Core inflation, which excludes food, energy, alcohol and tobacco, dipped from 3.4% in February to 3.2% last month. The Retail Price Index fell and the Tax and Prices Index, each fell by 0.2%, to 5.3% and 5.8% respectively.
THE RATE at which the private sector in London took on staff hit its quickest pace for almost three years in March, a survey by Lloyds TSB and Markit revealled. The jobs market also grew for a second consecutive month for the first time since last April. The capital’s service-driven economy helped to boost employment, as the sector continued to take on new staff.
EXPORTS beyond the European Union helped narrow the UK’s trade gap to £2.4bn in February, in from £3.9bn in January. The deficit in visible goods traded dropped to £6.8bn, a fall of £1bn in the month, its lowest rate for a year.
THE US posted a monthly budget deficit of $188bn in March, and the IMF urged the White House to make major adjustments next year to put the US budget back on track. The deficit will hit 10.8% of GDP this year, the largest among major developed economies. President Obama will today outline fresh plans to reduce the nation’s debt, which is on track for hitting $1.4tn this year.
MINING firms were the top fallers in the FTSE 100 yesterday after Goldman Sachs released a note to investors advising them to sell commodities. In the US, the Dow was led down by energy stocks, on fears that falling oil prices could set off a reversal in the energy sector.
THE NIKKEI edged higher overnight, with investors looking to pick up bargains in large caps after two sessions of declines pulled the benchmark index away from its 2011 peak. The Shanghai Composite Index hovered above the key 3,000-point level, as investors remain cautious ahead of this week’s economic data.
EUROPEAN and UK shares are expected to bounce back in early trade on Wednesday after sharp declines in the previous session, with investors seen buying beaten-down stocks, though the technical outlook remains bearish.
STERLING fell to a 5½-month low against the euro yesterday, close to its weakest level in a year after a surprise drop in inflation reduced the chance of a near-term UK interest rate rise. THE YEN fell overnight as some investors looked to rebuild bets against the low-yielding currency, suggesting appetite for riskier assets could soon return.
BRENT oil prices edged above $121 a barrel overnight after losing 4% in two sessions, despite warnings that a price surge could curb demand.
COMMODITY prices dipped yesterday after long-term bull Goldman Sachs advised clients to close their long positions on a basket of commodities including copper, platinum, soybeans and crude oil. The sector improved overnight, however, as investors appear to be buying back at bargain prices.