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Pre-market briefing|: UK growth to pick up in 2014 say employers

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UK Market Snapshot

UK markets finished mixed yesterday, as discouraging Chinese industrial production data was offset by better than expected US retail sales data. The FTSE 100 advanced 0.1%, to close at 6,631.8, while the FTSE 250 slid 0.1%, to settle at 14,299.9. 

US Market Snapshot

US markets closed mixed yesterday, following upbeat US retail sales data and speculation that the Federal Reserve could exit its bond purchase programme earlier than expected. The DJIA shed 0.2%, to settle at 15,091.7, while the NASDAQ advanced 0.1%, to close at 3,438.8. The S&P 500 finished unchanged at 1633.8.

Europe Market Snapshot

Other European markets finished mostly lower yesterday, ahead of the euro zone finance ministers meeting in Brussels. The German DAX Xetra 30 settled almost flat at 8,279.3, while the French CAC-40 shed 0.2%, to settle at 3945.2.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning, as investor sentiment was boosted after the US retail sales data came ahead of market expectations. In Japan, the Nikkei 225 index is trading 0.2% higher, at 14,817.1. Hang Seng index is trading 10.1 points down, at 22,979.7, while the Kospi index is trading 0.8% higher, at 1,964.7. 

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.12% or $0.12 higher at $102.94 per barrel. Yesterday, the contract declined 1.05% or $1.09, to settle at $102.82 per barrel.

Gold

At 0330GMT today, gold futures contract is trading 0.45% or $6.4 higher at $1440.7 per ounce. Yesterday, the contract fell 0.16% or $2.3, to settle at $1434.3 per ounce, as the greenback strengthened and amid speculation that the Federal Reserve would wind up its monetary easing policies in the US.

Currency

At 0330GMT today, the EUR is trading at $1.3016 against the USD, gaining 0.22%, ahead of euro zone’s industrial production data to be released later today. Yesterday, the EUR strengthened 0.03% versus the USD, to close at $1.2987.

At 0330GMT today, the GBP strengthened against the USD, slightly gaining 0.07%, to trade at $1.5317, ahead of the UK’s CB Leading Economic Index to be released later today.

Fixed Income

In the US, long term treasury prices fell, pushing the yields mostly higher, as upbeat US retail sales data reduced the demand for safe haven assets. Yesterday, yield on 10-year notes rose 2 basis points to 1.92%, while yield on 2-year notes lost 2 basis points to 0.24%. Meanwhile, 30-year bond yield increased 3 basis points to 3.13%. 

Key Economic News

UK house price balance rose less-than-expected in April, indicates RICS

The Royal Institution of Chartered Surveyors (RICS) reported that, house price balance in the UK rose to a seasonally adjusted 1% in April, marking its first positive reading since June 2010 and following a revised drop of 2% recorded in the previous month. Market had expected house price balance to rise to 2% in April.

UK economic growth to pick up in 2014, says CBI

The Confederation of British Industry (CBI) reported that the British economy would continue its expansion in the current year and the growth is expected to gain ground in 2014. In its latest economic forecast, the CBI projects the GDP to grow 1.0% in 2013, unchanged from its previous forecast. In 2014, growth is seen at 2.0%. CBI Director-General John Cridland said, “The UK economy is moving from flat to growth.”

Bailout payments to Cyprus and Greece agreed by the Euro-group

The Euro-group meeting of finance ministers approved disbursement of bailout tranches to Cyprus and Greece

US retail sales rose unexpectedly in April

The Commerce Department reported that on a month on month basis, advance retail sales in the US rose 0.1% in April, following a downwardly revised 0.5% drop recorded in March. Market had expected the retail sales to drop 0.3% in April, compared to 0.4% drop originally reported in the previous month.

Chinese industrial production rose slightly less-than-expected in April

On an annual basis, industrial production in China grew 9.3% in April, following an 8.9% rise recorded in March. Market had expected the industrial production to increase 9.4% YoY in April. On a year to date basis, industrial production rose 9.4% YoY in April, following a 9.5% rise recorded in March.

Chinese retail sales rose in line with the market expectations in April

On a yearly basis, retail sales in China grew 12.8% in April, in line with the market expectations and compared to 12.6% increase recorded in the previous month. 

 


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