Holiday trading to keep markets flat

Daily Analysis - 25/03/2016

BoJ Core CPI, unchanged at 1.10%

Consumer price data from Japan released in the overnight session showed the BoJ's core CPI staying unchanged at 1.10% in February from a month ago, but exposing the risk of a dip below 1.0%. Consumer prices stayed flat for the second consecutive month following a decline from 1.20% in December last year.

7.3 billion Euros in loans taken up at ECB’s TLTRO

The European Central Bank's targeted long term refinancing operations saw European banks take up 7.3 billion Euros in loans, less than the 18.3 billion Euros that were borrowed in December. The TLTRO was launched to help banks to boosting lending to consumers and is into its seventh round of lending. In total, European banks have taken a total of 426 billion Euros since the program was launched in 2014. Yesterday's TLTRO operation comes under the old rules but starting June, the TLTRO-II will be launched where the ECB will pay banks to take the loans to boost lending.

UK Retail sales helps the GBP

UK retail sales figures in February came out better than expected, but continued to post a decline in retail sales. The data helped the British Pound to recover some of the losses from earlier this week. For February, UK’s retail sales fell -0.40% on the headline, less than the forecasted -0.70%, while on a year over year basis, retail sales slowed to 3.80%, from 5.20% in January. The data helped the British Pound to reverse its losses after the British Pound fell to a 5-day low to test $1.4072 on renewed uncertainty over the UK’s referendum vote in June 2016. GBPUSD closed the day with gains of 0.25% settling at $1.4140. The data comes following weak inflation figures released earlier this week with consumer prices continuing to stay consistently below the Bank of England’s inflation target rate of 2.0%

US weekly jobless claims consistently below 300k

The weekly jobless claims in the US came to a seasonally adjusted 265k for the week ending March 18th, up 6k from the previous week's revised figure of 259k, according to data from the US labor department. The weekly jobless claims, marks a 55th consecutive week of trending below the 300k mark staying consistent with the improving US labor market. However, offsetting the positive data was US durable goods orders which fell -2.80% in February, matching estimates. Previous month's durable goods orders were revised lower from 4.90% to 4.20% on the headline while core durable goods orders were revised from 1.80% to 1.20%. The declines came with a fall in civilian airline orders which fell -27.10% from January and dwindling military aircraft orders during the month. The weak durable goods orders pointed to the softness in the US manufacturing sector.

US GDP data awaited amidst bank holiday

Most of the global markets are closed today on account of Good Friday. There are not much of economic releases scheduled in the European session with the exception of French GDP data. Estimates show that the fourth quarter GDP is expected to stay unchanged at 0.30% on a quarterly basis, while annual GDP is expected to remain steady at 1.40%. The US trading session will see the release of the final revision to the fourth quarter GDP data, which is expected to remain unchanged at 1.0%, while the GDP price index is expected to tick higher to 1.0% from 0.90% as of the previous release.