Financial markets climbed further higher on better-than-expected US economic data. In the European session, the euro soared after the ECB left the monetary policies unchanged and President Draghi affirmed that the Eurozone would stage a recovery later this year. In the commodity sector, crude oil prices rose as driven by strength in the euro and lifted speculations of a strong US employment report today. Gold slipped as pauses in monetary policies by the BOE, ECB and BOJ upstaged geopolitical tensions in the Korean peninsula. The UNSC approved sanctions against North Korea’s nuclear tests.
Both the ECB and the BOE left their monetary stance unchanged. The ECB left the main refinancing rate unchanged at 0.75% and did not announce new quantitative easing measures. The central bank saw downside risks to economic developments. These risks include "the possibility of weaker than expected domestic demand and exports" and "slow or insufficient implementation of structural reforms" in the bloc. Meanwhile, the need to cut costs would delay recovery. President Draghi expected the Eurozone should return to growth in 2014 with the forecast range between 0- 2%. Inflation next year would range from 0.6% to 2%. The BOE announced to keep the Bank Rate at 0.5% and the asset purchases at 375B pound. The committee only released a short statement and details of the discussion should not be disclosed until release of the minutes on March 20.
In the US, initial jobless claims slipped -7K to 340K in the week ended March 2, sending the 4-week moving average -7K lower to 349K. Continuing claims, however, increased +3K to 3 094K after the prior week was revised +17K higher to 3 091K. The market is awaiting the employment report due today. Non-farm payrolls probably increased +158K in February from 157K a month ago. Unemployment rate might have stayed unchanged at 7.9% last month.
In response to North Korea’s latest nuclear test, the UNSC passed a resolution approving new sanctions against the reclusive regime. There are new financial sanctions aimed at blocking financial transactions. It also extended an existing ban on North Korea's trade in items related to the nuclear and ballistic missile program. US Ambassador Susan Rice stated that “taken together, these sanctions will bite, and bite hard… They increase North Korea's isolation and raise the cost to North Korea's leaders of defying the international community". A few days before voting of the resolution began, North Korea threatened to end the armistice signed after the Korea War 60 years ago.
Latest Analysis from this Author
Gold Weekly Technical Outlook (Saturday, 16 March 2013 10:05 ET)Silver Weekly Technical Outlook (Saturday, 16 March 2013 10:05 ET)Crude Oil Weekly Technical Outlook (Saturday, 16 March 2013 10:05 ET)Natural Gas Weekly Technical Outlook (Saturday, 16 March 2013 10:04 ET)Weekly Fundamentals - WTI- Brent Spread Narrowed o... (Saturday, 16 March 2013 02:38 ET)Strong US Data Sent Shares to New Highs (Friday, 15 March 2013 01:03 ET)Economic Calendar 3/15/13 (Thursday, 14 March 2013 22:13 ET)IEA Lowered Global Oil Demand Growth Forecast for ... (Thursday, 14 March 2013 08:50 ET)Crude Weakened on Inventory Increase (Wednesday, 13 March 2013 23:14 ET)Economic Calendar 3/14/13 (Wednesday, 13 March 2013 23:12 ET)
No comments:
Post a Comment