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Steady start for stocks with PMI, inflation and survey data on the way

apple iphone ipad tablet

apple iphone ipad tablet

Apple had an up and down day starting out with a rally but then turning sharply downward after announcing smaller and cheaper versions of its iPhone and iPad and a price cut for the iWatch. Trades weren’t very enthusiastic about the news which suggests that the iWatch hasn't been doing as well as hoped. The shift from lower margin more mainstream priced products also indicates the growth potential in the high end has probably been tapped out.   

In energy trading, WTI crude oil rebounded toward $40.00 while gasoline gained 1.5% as traders start to anticipate summer driving season. Natural gas, on the other hand failed to hold onto early gains and turned downward with traders recognizing the current cold snap as the last gasp of a weak home heating season.

The main action in currency markets today was a moderate 0.5% decline in GBP relative to USD and EUR. Uncertainty over a close Brexit vote and questions over the recent budget have been overhanging Sterling after Iain Duncan Smith, a former Conservative party leader, resigned his post as Works and Pensions secretary in opposition to a government plan to cut benefits for disabled people. There also have been suggestions Mr. Smith’s support for Brexit may have led to tensions with senior cabinet members as well. This development didn’t have a major impact on the FTSE which has been trading similar to US markets so far today. Sterling may remain active through tomorrow’s UK inflation reports.

Asia Pacific indices have continued to trend higher this morning as they try to catch up to the rebound gains made in other regions having lagged behind in recent weeks. A rebounding USD on comments from Atlanta Fed President Lockhart trying to put an April rate hike back on the table despite last week’s dovish FOMC signals has knocked JPY back taking some of the pressure off of Japanese stocks, while the India market continues to rally and Chinese markets benefit from the return of margin lending.
There are a flurry of economic surveys due over the next day or so, headlined by Flash PMI reports for Japan, the US, Germany and France which may give the first insight into how global economies are performing in March so far. Germany may attract particular attention with the ZEW investor and IFO business surveys also on the way.  

Corporate News

There have been no major corporate announcements after the US close today

Economic News

Significant announcements released overnight include:

US existing home sales            5.08M vs street 5.31M

UK Rightmove house prices        7.6% vs previous 7.3%
UK CBI total orders            (14) as expected
UK CBI selling prices            (1) vs previous (3)

Eurozone consumer confidence         (9.7) vs street (8.3)

Upcoming significant economic announcements include:

(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)  

1:00 pm AEDT        Japan flash manufacturing PMI        street 50.5

8:00 am GMT        France flash manufacturing PMI        street 50.2
8:00 am GMT        France flash service PMI        street 49.5

8:30 am GMT        Germany flash manufacturing PMI    street 50.8
8:30 am GMT        Germany flash service PMI        street 55.0

9:00 am GMT        Germany IFO business climate        street 106.0
9:00 am GMT        Germany IFO current assessment    street 112.7
9:00 am GMT        Germany IFO expectations        street 99.5

9:30 am GMT        UK consumer prices            street 0.4%
9:30 am GMT        UK core CPI                street 1.2%
9:30 am GMT         UK retail prices                street 1.3%
9:30 am GMT        UK producer input prices        street (7.4%)
9:30 am GMT        UK producer output prices        street (1.2%)
9:30 am GMT        UK ONS house prices            previous 6.7%

10:00 am GMT        Germany ZEW current situation        street 53.0
10:00 am GMT        Germany ZEW expectations         street 5.4

9:45 am EDT        US flash manufacturing PMI        street 51.9
10:00 am EDT        US Richmond Fed            street 0 vs previous (4)

12:30 pm EDT        FOMC Evans speaking

4:00 pm EDT        Canada Morneau federal budget


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