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Market news - 15 March 2019

by  Niloofar Rafiei  |  15 Mar 2019


  • Core US retail sales came in above expectations in January, +1.1% over the month, and overall +0.2% including auto, gas and building materials. Economists are not expecting the latest retail sales data to change the Federal Reserve’s resolve to keep interest rates on hold for the time being.
  • On the other hand, February industrial production (+0.1% actual vs +0.4% expected) and manufacturing production (-0.4% vs +0.1% expected) were underwhelming. NIFB small business and Empire Manufacturing surveys were also somewhat muted.
  • The S&P 500 looks poised to post a weekly close above the 2,800-2,817 area which provided overhead resistance since the sell-off last October and talk is increasingly of when rather than if it will break 3000. The Fed meeting next week could provide the next catalyst – there is a strong possibility that a timetable for the conclusion of reserves shrinkage will be produced.


  • Eurozone industrial production exceeded expectations in January, rising 1.4% over the month (consensus: +1.0%). Non-durable goods and capital goods increased 2% month on month and +0.9% month on month respectively, recovering December’s losses of -2.0% and -1.1%. The weakness in durable consumer goods production (-1.2% year on year) is likely attributable to the car industry, which has seen disruption in production since some of the major automotive supplier companies went on strike in Germany.


  • UK GDP came in ahead of consensus at +0.5% month on month in January (consensus: +0.2%, December: -0.4%), largely driven by services. All three major sectors beat expectations; services +0.3% (consensus: +0.2%), industrial production +0.6% (consensus: +0.2%), construction +2.8% (consensus: +0.8%). The services sector, which accounts for ~80% of the private sector economy, grew by 0.5% on a rolling 3-month basis, driven by wholesale and retail trade. The increase in wholesale is causing some concern that this may be indicative of stockpiling ahead of Brexit.


  • Data released from China this week was mixed, showing property investment picking up while overall retail sales were sluggish. Jan-Feb industrial production confirmed moderating growth at the beginning of the year, coming in at +5.3%. Fixed asset investment growth recovered to 6.1% year on year, up from 5.9% through full year 2018, although infrastructure investment growth slowed. Retail sales were marginally better than expected, rising 8.2% in January – February from a year earlier, but still at 15-year lows after years of falling on a steady downward trajectory.
  • After seeming to falter into the end of last week on gloomy OECD/ECB growth forecasts and delay of China/US summit meeting on trade, risk markets rebounded decisively this week, with equities, energy and base metals all rising.