Big Data Analytics Solutions | Financial Services in India |Decimal Point Analysis

Weekly Market Report

23 Mar 2020

23 March 2020

Image
Image
Image

The Market Last Week

Global equities ended sharply lower last week, as the economic fallout from the coronavirus pandemic outpaced the massive stimulus measures by policymakers worldwide.


UK Markets ended the week in negative territory, amid fears that the coronavirus outbreak would severely hurt corporate earnings.

Average earnings including bonus advanced in the three months to January.

Public sector net borrowing unexpectedly posted a surplus in February.

The ILO unemployment rate unexpectedly rose in the three months to January.

Consumer inflation expectations declined on an annual basis in February.




European Markets ended the week on a negative footing, as most of the regions in Europe went into shutdown mode to prevent the spread of the new coronavirus.

Eurozone’s ZEW survey economic sentiment index declined in March.

In the Eurozone, seasonally adjusted current account surplus widened less-than-expected in February.

Eurozone’s seasonally adjusted trade surplus unexpectedly narrowed in January.

Consumer price inflation in the Eurozone slowed as initially estimated in February.

Eurozone’s seasonally adjusted construction output rebounded on a monthly basis in January.

Germany’s producer price index (PPI) unexpectedly eased on an annual basis in February.

The ZEW survey current situation in Germany index dropped in March.

German ZEW survey economic sentiment index fell to its lowest level since 2008 financial crisis in March.

The flash Ifo current assessment index in Germany slid in March.

Germany’s preliminary Ifo business climate index sharply dropped to its lowest level since August 2009 in March.

The preliminary Ifo business expectations index in Germany declined in March.




US Markets ended the week in red, as growing concerns over the COVID-19 outbreak stoked fears of a coronavirus-driven recession.

The US Empire State manufacturing index declined to its lowest level since 2009 in March.

Retail sales unexpectedly declined on a monthly basis in February.

Business inventories slid in January, in line with market forecast.

The NAHB housing market index dropped in March.

Industrial production rebounded on a monthly basis in February.

The JOLTS job openings unexpectedly rose in January.

Current account deficit narrowed less than market forecast in 4Q19.

The Philadelphia Fed manufacturing index unexpectedly eased in March, hitting its lowest level since summer 2012.

The MBA mortgage applications declined on a weekly basis in the week ended 13 March 2020.

Building permits declined more-than-expected in February.

Housing starts dropped less than market forecast on a monthly basis in February.

Existing home sales climbed to its highest level in 13 years in February.

Initial jobless claims advanced to its highest level in 2.5 years on a weekly basis in the week ended 13 March 2020.




Asian Markets ended weaker last week, as mounting concerns over the economic impact of the global coronavirus outbreak continued to weigh on investor sentiment.

China’s house price index rose in February.

Industrial production declined on a yearly basis in February.

China’s retail sales plunged on an annual basis in February.

Australia’s house price index advanced on a quarterly basis in 4Q19.

Australia’s Westpac leading index declined in February.

Seasonally adjusted unemployment rate in Australia unexpectedly dropped in February.

Japan’s industrial prdcution rose less than market expectations in January.

The consumer price index (CPI) in Japan rose less than market forecast on an annual basis in February.

Japan posted a trade surplus in February.

In Australia, the Westpac consumer confidence index dropped in 1Q20.

The Bank of Japan (BoJ), in its latest monetary policy meeting, kept its key interest rate unchanged at -0.10%, as widely expected. However, the central bank announced that it would expand its stock purchases, bonds, other assets and provide zero interest one-year loans to companies running short of cash, to combat the impact of the coronavirus outbreak. Additionally, the BoJ Governor, Haruhiko Kuroda, stated that the central bank would closely monitor the impact of COVID-19 and would not hesitate to take additional easing measures, if necessary.

The BoJ, in its monetary policy meeting minutes, revealed that most members agreed that it was appropriate to continue with the current monetary easing policy, in wake of the coronavirus outbreak. However, one official suggested that negative rate could affect investor sentiment by making households, firms more pessimistic about economic outlook. Meanwhile, a policymaker cautioned that the central bank must brace for the risk of another recession by strengthening cooperation with the government's fiscal policy.

The People's Bank of China (PBoC), in its interest rate decision, unexpectedly kept its key interest rate unchanged at 4.05% and kept the five-year rate unchanged at 4.75%.

The Reserve Bank of Australia (RBA), in its latest interest rate decision, slashed its key interest rate by 25bps to 0.25% to curb the economic impact of the coronavirus outbreak. Further, the central bank stated that it would purchase government bonds in the secondary market and keep the yield on 3-year bonds at around 0.25%.

Minutes of the RBA's latest meeting signalled that the policymakers are prepared to ease monetary policy further to support Australia’s economy. Moreover, board members indicated that the coronavirus would have significantly affected the country’s national finances and that a near term containment of the virus was considered “very unlikely”. Meanwhile, the central bank expects first quarter growth to be noticeably weaker than previously anticipated.




Image

Currency Update

The EUR ended lower against the USD last week, as the severe disruption of the coronavirus pandemic shut down most activities across Europe.
The British Pound ended weaker against the greenback in the previous week, as investors fled from UK assets after the pandemic began spreading through Britain.
The US Dollar ended stronger against its major counterparts last week, as ongoing financial market volatility and tightening liquidity buoyed investors’ appetite for the safe haven currency.


Image

BoE slashes interest rate to reduce impact of coronavirus outbreak

The Bank of England (BoE), in its latest monetary policy decision, cut its benchmark interest rate by 15bps to 0.1%, in an effort to offset the economic impact of the coronavirus outbreak. Moreover, the central bank announced that it would make additional bond purchases worth GBP200bn effectively printing new money to push into the financial system.


Image

The Week Ahead

Going ahead this week, investors will keep a tab on the BoE’s monetary policy decision, the UK’s CPI, PPI, the retail price index, retail sales, the Nationwide house prices, the Markit manufacturing and services PMI along with the US gross domestic product, trade balance, personal income and spending, housing price index, new home sales, the Michigan consumer sentiment index, the manufacturing and services PMI for further direction. Additionally, Eurozone’s consumer confidence index, the Markit manufacturing and services PMI across the Eurozone along with Germany’s CPI, the Ifo survey indices, the GfK consumer confidence index will be on investors’ radar.


Image

Send us an email on research@decimalpointanalytics.com for your feedback

To make sure you receive all the emails from Decimal Point, please add us in your address book.

Image


Contact Us

5A, B-Wing, Trade Star Building, J. B. Nagar, Andheri-Kurla Road, Andheri (East), Mumbai - 400 059, Maharashtra, India

www.decimalpointanalytics.com | info@decimalpointanalytics.com | +91 22 4919 5200

Incase you want to unsubscribe from this mailing list please click on the link UNSUBSCRIBE

×

Decimal Point Analytics (DPA) will process the information in this form to share information as requested. By checking the above box you confirm your acceptance to receive the communication. You can unsubscribe any time by clicking the ‘Unsubscribe’ link in the footer of any email you receive from us, or by contacting us at

We use cookies to measure website performance, provide social media features and personalize content.
Close this dialog to confirm you are happy with that, or find out more in the privacy statement.