China's Trade Surplus Dropped 50% in February

Crude oil benchmarks broke out above key resistance levels, with prices rallying at the fastest rate of 2016. Brent crude topped a price of $41.04 whereas West Texas Intermediate peaked at $38.09. The summation of the National People’s Congress in China over the past weekend has seen policymakers adjust their expectations on future energy consumption, with the Congress announcing plans to cap its energy use by 2020.  This however could prove bearish, especially in a market that remains heavily oversupplied.  Despite production reductions and demand slightly rising alongside the latest report from Baker Hughes citing the oil rig count at the lowest since 2009, no planned output cuts across major global producers mean that the decline in oil prices might not yet be over.  Even though some are calling the latest lows the bottom, prices could once again test these multi-year lows.

Japan’s Gross Domestic Product contracted less than preliminary indications of -1.40% for the final quarter of 2015. The Japanese Cabinet Office reported annualized GDP at -1.10% for the final quarter, missing expectations of -1.50%. On a quarterly basis, GDP also showed marginally better results for the final quarter, with the government reporting a contraction of -0.30% compared to -0.40% seen initially. The country’s economy is still overshadowed by the slowdown in neighboring China, adding pressure to act on the Bank of Japan. The move into negative rate territory in order to help spur devaluation and boost household spending has so far shown limited impact. Fundamental economic indicators remain weak and the government or central bank will likely be forced to provide new stimulus. The main source of weakness indicated by the report was due to falling consumption, matching forecasts from both the IMF and the OECD.