17/03/10

FTSE 100	5620.43, +26.58	Dow	10685.98, +43.83
FTSE 250	9930.04, +51.03	Nasdaq	2378.01, +15.8
FTSE All Share	2875.89, +13.31	S&P 500	1159.46, +8.95
Nikkei	21384.49, +361.56	Hang Seng	10846.98, +125.27
Oil (Crude)	$81.70, +$1.9	Gold	$1122.50, +$17.1
Base Rate	0.5%	10 Yr Gilt	4.02%
£/$	1.523	Euro/Gbp	0.904

Markets

US indices finished higher yesterday after the Federal Reserve announced its decision to hold its benchmark interest rate near zero and Standard & Poor's ended its review for a downgrade of Greece. The Fed echoed previous statements, saying rates will remain "exceptionally low" for an "extended period" of time. The Fed said economic conditions continue to improve and that the job market is stabilizing. While the Fed expects economic growth to be "moderate" in the short run, the bankers said activity could pick up in the future as inflation remains tame. Meanwhile, Standard & Poor’s said the Greek government's recent deficit-reduction measures are supportive of the ratings. The Dow Jones rose 43.83 points to 10,685.98, the S&P 500 added 8.95 points to 1,159.46 and the Nasdaq gained 15.8 points to 2,378.01. In corporate news, Intel climbed 4% after the chip maker unveiled new processors it says can deliver up to 60% greater performance than the previous generation processor. General Electric advanced 4.5% after the Dow component’s chief financial officer said he expects the company’s earnings and dividend to rise 2011.

The Nikkei jumped 361.56 points to 21,384.49 this morning. Consumer lenders and commodity companies led the index higher after the Fed kept interest rates static and the Bank of Japan expanded a bank-loan program. The central bank doubled a three month loan facility to 20 trillion yen, aimed at shoring up liquidity in the deflation plagued economy. The Hang Seng was also boosted by the Fed’s decision, gaining 125.27 points to 10,846.98.

The FTSE 100 added 26.58 points to close at 5,620.43 yesterday. Stocks climbed after Standard & Poor’s said it’s no longer reviewing Greece’s credit rating. Barclays jumped 2.5% after Morgan Stanley named the bank as one of its “top picks” in Europe. Antofagasta led mining companies higher as metals rose. British Airways surged to an 18 month high after reaching an agreement with unions to reduce its pension deficit. This morning the index gains 18.7 points to 5,639.13.

Economics

UK BoE minutes (4 Mar meeting) 09:30 GMT

The vote to keep rates and the QE programme unchanged at the March meeting will have been unanimous and the minutes are unlikely to point to any substantial change in the outlook for monetary policy. While the January data have been extremely weak, the strength of the surveys in February suggests this was related to the snow. As such, the MPC will restate the standard line that there is a very large amount of spare capacity in the economy that needs to be absorbed before the Committee need be concerned about medium-term inflationary pressure.

UK Unemployment rate (Jan/Feb) 09:30 GMT

After falling in the last two months of 2009, the number claiming unemployment benefits rose in January which contrasted with the evidence from the business surveys. Like the other data for January, it is possible this was affected by the snow, although there isn’t clear evidence that previous snow had an impact on jobs. Overall, analysts expect this to have been a blip and believe it is likely claimant unemployment fell again in February.

UK Average weekly earnings (Jan) 09:30 GMT

The latest pay settlement data suggest underlying pay growth is starting to pick back up, albeit from extraordinary low levels. With RPI also moving back into positive territory, those pay deals linked to RPI will also start to push up on pay growth excluding bonuses. The financial sector bonuses are likely to lead to a sharp rise in headline inflation over the next two months, as the extraordinary weakness in bonuses last year drops out of the equation.

US PPI (Feb) 12:30 GMT/ 08:30 EDT

Recent PPI releases have continued to show pipeline pressures in the supply chain for manufactured goods, but with only limited pass through into finished goods prices. Core finished consumer goods prices are up just 1.6% from a year ago, although January saw a relatively large increase of 0.4%, while capital equipment prices are essentially unchanged from a year ago. Analysts think the headline PPI could fall 0.3% in February on the back of lower energy prices, while the core PPI could be muted at 0.1%, assuming a pullback in light truck prices after January’s 1.9% increase.

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