FOMC Minutes: Downside Risks Lead to Dovish Consensus

Hot on the heels of a 1.20% decline in manufacturing production, yesterday's industrial production data released by the German economy ministry showed a 0.50% contraction. This follows a revised 2.30% expansion in January which was originally estimated at 3.30%. Manufacturing output remained weak offsetting the gains in the construction sector in Europe's largest and strongest economy. The ministry noted that Germany's industrial companies had a fairly positive start to the year and that solid gains are to be expected in both the manufacturing and industrial sectors in the first quarter, raising expectations that March's numbers could see an upturn. On a twelve month basis the latest industrial production numbers fared better, rising 1.30% from the figures of February 2015.

The weekly crude oil inventories report from the US Department of Energy released yesterday showed a surprise drawdown, snapping a seven consecutive weekly increase. For the week ending April 1st, US commercial crude oil inventories fell by 4.93 million barrels after the previous week showed an increase of 2.3 million. Analysts were expecting to see an increase of 3.1. US gasoline inventories, which has been in strong demand in the previous weeks, saw a surplus of 1.438 million barrels, dashing expectations of a decline of 1.295 million. Following the release of the weekly inventory report, WTI crude oil posted a strong rally to close at $37.76 yesterday. Oil prices have remained volatile as prices started to decline steadily for two straight weeks following a strong rally to touch a 4-month high at $41.66 a barrel.