Europe Europe has seen significant losses today with protests in Turkey again stoking emerging market fears. The Dax failed to follow the S&P to new highs last week and is leading the charge lower today. It is not far shy of the February 4th low of 9070, which would technically need to hold to keep the index in its current uptrend. Although concerns out of Eastern Europe and China are not boosting positive sentiment, perhaps the hidden theme for markets this last week has been a lack of central bank stimulus. There had been hopes last week that the European Central Bank would support the Eurozone economy with a cut in interest rates. Since European inflation came in above expectations, the central bank has obviously decided to hold back stimulus until a time when there is greater need. The 175k US jobs produced in February, while good for US economic growth, have all but sealed the deal that the FOMC will decide to continue the pace of tapering the central bank’s stimulus at next week’s meeting. The Bank of Japan yesterday decided to keep its quantitative easing at current levels, against expectations of an increase in stimulus after revised down Q4 GDP growth and ahead of the consumption tax increase next month. On the data-front today, European industrial production data came in way below expectations at -0.2%. This contrasts with the relatively strong industrial production of 0.8% announced in Germany last week. So while central bankers are scaling back support across the developed world, it is really only the US, and to some extent the UK, that are justifying it through the economic data. Data from Europe and Japan has been lacklustre at best, which appears to be reflecting in global indices with the S&P and FTSE making multi-month highs in February, while the Dax and Nikkei failed to do so. Poundland’s shops are proving a lot cheaper than its shares which were up over 30% from the initial public listing price of 300 pence today. If the success of discount retailers, Aldi and Lidl, are anything to go by, Poundland could be a continued success story in a UK economy still trying to recover from recession. Insurer Prudential reported positive earnings today and shareholders felt the benefit with a 15% rise in yearly dividend and the share price rising over 3% US In another session with no significant economic data, US markets are following Asia and Europe lower. The last week appears to have seen a slight shift in sentiment in US markets. On Tuesday March 4th, the S&P 500 ramped up 30 points to new all-time highs, despite what looked to be imminent conflict in Crimea. Then three days later on Friday, the day ended essentially flat after better than expected US payrolls data. The relative influence of international markets also appeared to shift. The previous week was characterised by lower opens in Asia and Europe, subsequently dragged higher by US indices. This week we have seen the Asian and European markets drag the US down with them. Express (EXPR) reported fourth quarter profit below expectations and lowered full-year profit forecast. Verifone Systems (PAY) was up 8% amidst a declining market after reporting strong Q1 results and a positive 2014 outlook. M&A news in the energy sector pushed shares in EPL up 30% today after a takeover announcement from Energy XXI for $1.53Bn. FX The US dollar was mixed today with gains against the Canadian dollar and losses against the euro. After a dip towards the February 28 high yesterday, EURUSD is back retesting 1.39. It looks like it’s still on track for 1.40. USDCAD is still staging a re-test of the top of the recent range at 1.12, which is also the 50% retracement of the 2008-2011 decline. The pair formed a higher low on March 6th, consistent with an uptrend. Commodities WTI crude oil traded down again today, below the 200 day SMA towards the 98.50 previous high/low pivot price. Gold was up 1.5% having successfully cleared 1350 pivot price and aforementioned down-trendline and potentially opening the doors to much higher prices. Copper recovered a little from the past week’s devastation, off the 2010 lows around 300. CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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