46 Jobs | 974661 Resumes

Friday financial focus

Friday Headlines:
• Markets: European markets may temporarily end two-session slide
• Currencies: Yen extends losses, sterling at 4-year low against USD
• Energy: Oil set for biggest weekly drop since October
• Commodities: Gold drops for fourth day and nears bear market
• Eurozone: Inflation reaches a 31-month low
• Cyprus: Ministers pledge to stick to the agreement
• USA: Weak data hits outlook
• Emerging Markets: Strong Far Eastern economies spur growth
• Eurozone: ECB rate cut on the agenda
• UK: Brits half their mortgage debt
• Focus on: The effect of Japan’s monetary stimulus on world markets

Markets: European markets may temporarily end two-session slide
European stocks are set to open flat on Friday, halting a sharp twosession
slide, although the pause could be short lived, with mounting
concerns over the pace of the US economic recovery in the wake of
poor macro-economic figures.

Currencies: Yen extends losses, sterling at 4-year low against USD
The yen reached its weakest level since August 2009 as investors
speculated the Bank of Japan’s ¥7.5tn ($77bn) of monthly bond
purchases will devalue the currency.

Energy: Oil set for biggest weekly drop since October
Oil in New York traded near a two- week low and headed for its
biggest weekly drop since October after US inventories climbed to a
22-year high, raising concern that slower economic growth may
weaken fuel demand.

Commodities: Gold drops for fourth day and nears bear market
Gold fell for a fourth day, nearing its first bear market since 2008, as
investors reduced asset holdings amid optimism a global economic
recovery will curb haven demand.

Eurozone: Inflation reaches a 31-month low
Inflation across the Eurozone edged down further below target in
March, reaching a 31-month low, according to early estimates released this week. The euro area saw consumer prices
climb 1.7% over the year to March, Eurostat estimated, down from the 1.8% growth the bloc registered over the 12
months to February. This was the lowest annual inflation seen since August 2010, and comes after the zone saw mild
month-on-month deflation at the turn of the year.

Cyprus: Ministers pledge to stick to the agreement
Cypriot ministers promised to stick by the conditions of the troubled Eurozone state’s bailout package, having reassured
the island’s public that it is in the best interests of the struggling economy. The IMF had earlier revealed a €10bn rescue
package to be provided by the troika – which also includes the EU and ECB. The IMF will chip in with €1bn, with the UK’s
share estimated at around €50m. The Eurozone will make the bulk of the contributions. “We shall implement [the
memorandum of understanding] fully, and without any derogations. We shall meet all time-frames, we will meet all
targets,” responded new finance minister Harris Georgiades.

USA: Weak data hits outlook
America’s private sector added just 158,000 jobs to the economy last month, according to a widely regarded survey that
disappointed analysts this week. Stocks across the pond were weighed down by the bearish news, with two separate
data sets also coming in worse than expected for the world’s largest economy. A leading gauge of the US service sector
– the Institute for Supply Management’s (ISM) non-manufacturing index – slipped to 54.4 in March, down from 56 in
February. Scores above 50 indicate growth, yet the new figure revealed that the sector’s expansion has slowed. The ISM
report’s employment component was the lowest since November, dropping sharply to 53.3 from 57.2 in February.
Meanwhile applications for home mortgages fell by 4% in the final full week of March, according to a separate report from
the Mortgage Bankers Association.

Emerging Markets: Strong Far Eastern economies spur growth
Growth in emerging markets edged up last month, with economies in the Far East appearing to fare better than those
elsewhere. The latest HSBC emerging markets survey – formulated from Markit’s purchasing managers’ indexes (PMI) –
climbed to 52.6 from 52.4 in February. All figures above 50 indicate growth. “Faster growth in China was countered by
weaker expansions in Brazil, India and Russia,” the report said, while factory data was positive elsewhere in eastern
Asia. Manufacturing surveys for March revealed accelerating growth in Indonesia, South Korea, Taiwan and Vietnam.
Meanwhile China’s overall growth level also increased, from a PMI score of 51.4 in February to a faster 53.7 in March. By
contrast, growth slowed in India, Brazil and Russia, while Eastern Europe was also hit. Manufacturing PMIs in Poland
and the Czech Republic both showed a steepening rate of decline.

Leave a comment:

©2021 ExecutiveSurf | +44 2077291837 | Registered in England no. 1111 7389 - VAT. GB 291 0514 23