Global equity markets ended firmer last week, as news that the US President, Donald Trump has agreed to meet the North Korean leader, Kim Jong Un, eased investors worries about geopolitical tensions. UK markets ended the week on a positive footing, amid gains in financial and housebuilding sector stocks. On the data front, UK’s Markit services surpassed investor expectations in February, reaching its highest level in four months. Further, Halifax house prices rose in line with market expectations on a monthly basis in February. Meanwhile, the nation’s RICS house price balance showed a flat reading in the same month. European markets ended the week in postive territory, boosted by gains in financial, technology and automobile sector stocks. Additionally, the Eurozone’s fourth quarter gross domestic product (GDP) rose at par with market forecast on a quarterly basis. Separately, the region’s services PMI surprisingly fell in February. Moreover, the investor confidence dropped more than market forecast in March. Retail sales dropped in line with market epectations on a monthly basis in January. Meanwhile, German trade surplus narrowed and factory orders fell more than market forecast on a monthly basis in January. US markets ended higher last week. The US President, Donald Trump, implemented steel and aluminium import tariffs, except in Canada and Mexico. On the macro front, US private sector jobs posted an impressive rate of expansion in February. Moreover, the nation’s non-farm payrolls advanced in February, marking its highest level in one and a half year. On the contrary, US factory orders dropped in January, while the nation’s initial jobless claims rose more-than-anticipated for the week ended 2 March 2018. Additionally, the nation’s wage growth cooled on an annual basis in February. Asian markets closed higher last week, amid easing geopolitical tensions on Korean peninsula.


Currency Update


The EUR ended lower against the USD, after the European Central Bank reaffirmed its ultra-easy policy stance and kept its key interest rate steady. The British Pound ended stronger against the greenback, after the UK’s Services PMI rose more than market anticipation, notching its highest level in four months. The US Dollar ended mixed against its major counterparts last week, amid concerns over the US President, Donald Trump’s tariff plans.



Fed's Beige Book: Moderate inflation, tight labour market


The Federal Reserve’s (Fed) Beige Book report indicated that economic growth across the US remained at a “modest to moderate” pace in January and February. Additionally, it indicated that businesses across the 12 districts experienced persistent labour market tightness that contributed to “moderate inflation”, while many regions noted a pick-up in wage growth since the beginning of the year.



The Week Ahead


Going ahead this week, investors will keep a tab on the US monthly budget statement, consumer price index (CPI) and MBA mortgage applications along with the US Michigan consumer sentiment index and advance retail sales for further cues. Further, China and Japan’s industrial production along with Eurozone’s CPI, industrial production and German CPI will be on investors' radar.



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