Monday Headlines:
• Ireland to put pressure on UK to stay in Europe
• Greek resignations may hamper reform programme
• US adds 236,000 jobs in February, and retail sales are up
• China’s data shows weakest start since 2009
• Nikkei closed at new 4½ year high
• China shares slip after tepid economic data
• European markets may take a breather today
• Dollar approaches 3½ year high on US growth
• WTI oil drops from one-week high
News:
Ireland is fearful of a UK exit from Europe, and PM Enda Kenny will
urge David Cameron to do all he can to keep the nation in the EU.
Kenny, who believes that the planned referendum by 2017 could have
disastrous consequences for Ireland, said “We want to keep our ports
and gates of business open to and from Britain. That would be of such
fundamental importance for us here and for them, because of their
exports to Ireland”.
Greece’s privatisation chief and a senior finance ministry official
resigned on Saturday after they were charged with breach of duty over
their former role as board members of a state utility. The resignations
are a setback to Greece’s efforts to push through an ambitious reform
programme in a bid to turn around the debt-laden country, which relies
on aid from foreign lenders to keep afloat.
The US economy added 236,000 jobs last month, pushing the jobless
rate to a four-year low. The better-than-expected data from the Labour
Department showed the economy gaining traction despite higher taxes
and deep spending cuts. The jobless rate fell to 7.7%, the lowest since
December 2008, from 7.9% in January. In addition, sales at US
retailers probably rose 0.5% last month after a 0.1% gain in January,
according to the median estimate of economists surveyed.
China’s industrial output had the weakest start to a year since 2009
and lending and retail sales growth slowed, toughening challenges for a new leadership that wants to narrow the gap
between rich and poor. Production increased 9.9% in the first two months and retail sales rose 12.3%, government data
showed on Saturday. The decline in four February purchasing managers’ indexes, and official data released over the
past week, are raising concerns that a recovery that started in the fourth quarter may be peaking.
Markets:
Italian stocks will be in focus today after Fitch downgraded the country’s credit rating by one notch to BBB-plus, with a
negative outlook, citing political uncertainty following last month’s inconclusive election. The downgrade, which came
after most European stock markets’ closing bell, knocked Italian bond futures.
Overnight, The Nikkei share average closed at a new 4½ year high as investors bought financials and exporters after the
yen weakened on signs of recovery in the US economy, while hopes for monetary easing aided risk appetites. China
shares made a third straight daily loss, led by the banking sector after patchy economic data over the weekend raised
doubts that earnings will recover for Chinese companies.
Today, European stocks are seen steady, taking a breather from the previous week’s sharp rally, as Italy’s credit
downgrade and mixed macro data from China dent investors’ appetite for risky assets.
Currencies:
The dollar approached its highest level in 3½ years versus the yen as signs of a strengthening recovery in the world’s
biggest economy boosted demand for the US currency. The dollar gained 3% in the past three months, the euro added
2.9%, but the yen tumbled 13%, the biggest decline among the 10 developed-nation currencies tracked by Bloomberg
Correlation-Weighted Indexes.
Energy:
West Texas Intermediate oil dropped from the highest price in more than a week as Saudi Arabia boosted output and
industrial production slowed in China, the world’s second-biggest consumer of crude. Overnight, futures slid as much as
0.4% after gaining 1.4% last week, the most in a month.
Commodities:
Palm oil climbed to the highest level in almost two weeks on speculation that rising demand among importers led by India
may trim near record inventories in Malaysia, the world’s second-largest producer. Cooking oil imports by India, the
world’s second-largest consumer, probably climbed for a third month in February after palm oil prices tumbled and
speculation of a tax increase spurred buying by refiners and traders.
