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IMF Concerned About Global Economic Growth

IMF Director Christine Lagarde: “Global growth, too low for too long”

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Emphasizing that it was not an alarm but an alert, IMF Managing Director Christine Lagarde spoke at an event in Frankfurt, Germany on Tuesday and said that despite signs of a pickup in the global economy, the pace of the recovery was too slow and fragile as risks increase.

German Manufacturing Falls 1.2% in February

German manufacturing orders fell unexpectedly in February on extremely weak new bulk orders. According to data released by the economics ministry on Tuesday, total orders for Germany's manufacturing sector declined by a seasonally adjusted 1.20% in February compared to a month ago, coming below forecasts of 0.20%. January's manufacturing orders were revised higher to show a gain of 0.50%, from the original estimates which pointed to a decline of 0.10% during the month. The German economics ministry said that excluding the big ticket orders, German manufacturing would have been lifted by 0.30% if not for the volume of bulk orders which came out below average. On an annualized basis, Germany's manufacturing sector showed an increase of 3.40% in February compared to 12 months ago.

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UK Services PMI Rose Modestly in March

The services PMI from the UK for the month of March increased to 53.7 as forecasted and up from February's low of 52.7. However, despite the services PMI coming out better than the previous month, analysts are concerned by the UK's first quarter GDP growth. Overall, in the first quarter, the UK's PMI averaged out to 54.0 marking a three year low as the manufacturing and construction PMI remained muted during those months. Based on the quarterly PMI performance, expectations are that the UK's GDP growth could be limited in the first three months of the year anticipating a quarterly growth rate of 0.40%, coming off the Q4's strong finish at 0.60%.

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Canada's Trade Deficit Widens on Exports Plunge

Canada's trade deficit data released yesterday by Statistics Canada showed a deficit of 1.91 billion Canadian dollars, larger than the consensus of a 900 million CAD. The trade deficit widened as exports fell to a seven year low in February, falling 5.40%, the largest month over month decline. On a volume basis, exports decreased 2.20% while imports were down 1.20%. The trade deficit data marks a sharp reversal after only last week Canada reported that its GDP managed to surge 0.60% in January. The trade deficit for the previous month (January) was revised down from C$655 million to C$628 million. The surprise fall in exports will surely affect the monthly GDP which is now expected to come out weaker than the 0.60% growth in January.

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March FOMC Meeting Minutes to be Released Today

The minutes from the Federal Reserve's March FOMC meeting are due to be released later today at 18:00 GMT. Although the speech by Janet Yellen last Tuesday has provided the markets with more clarity on the Fed's stance on interest rates, the FOMC minutes could still influence the dollar with the markets inclined to see a softening stand in the meeting minutes, putting the US dollar at risk. Yesterday, the US Department of Commerce reported that the US trade deficit increased 2.60% in February to $47.1 billion. Meanwhile,January's deficit was revised up to $45.9 from the initial estimates of $45.7. The markets were in a risk off sentiment for most of the day, leading to gold posting strong gains intraday. Rising more than 1.29%, gold prices settled the day at $1230.72 an ounce.

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