A mixed week for global equity markets, the FTSE 100 climbed just under 1%, the S&P 500 did not fare so well falling 1.5%, the Euro first 300 finished the week roughly where it started it. The Nikkei 225 index of Japanese companies fell just over 1% as the yen continue to climb higher. The Vix index rose on the week to close back above 15. According to Lipper, exchange traded funds attracted $3.5bn of US stock inflows, likewise stock funds also saw inflows in the past week. The FTSE 100 was probably boosted by renewed strength in commodity markets as the Brent crude price finished the week back above $40 a barrel, and the broader Bloomberg commodities index rose 1.5% on the week.
The US weekly macro data was a mixed bag, on Monday factory orders for February came in lower than expected. March Institute for Supply Management’s (ISM) Services Purchasing Managers index reading of 54.5 was above the previous reading and ahead of expectations. Likewise the ISM March services business activity index reading was above the previous reading and ahead of expectations.
This week the data in the US is more consumer related. On Tuesday export and import prices paid, on Wednesday March retail sales and March producer prices. Thursday we get the latest US inflation report for March, year on year core inflation is expected to be unchanged at 2.3%. Overall year on year inflation is expected to drop to 1% and the month on month inflation rate is expected to fall to a negative 0.2%. Finishing the consumer week on Friday the Michigan Consumer sentiment preview for April.
It’s a busy week for the IMF as they publish their outlook for the global economy, ahead of their meeting with the World Bank on the 15th of April. Some forecasters expect another downgrade to global growth forecasts from the IMF. A growth rate below 2.5% is supposed to be a technical recession as the global population grows at that rate.
On Monday George Osborne is due to publish the Treasuries analysis of the benefits and risks of continued membership of the European Union. It was interesting to see a report in the Sunday Times that the senior Vice President and Chief Economist of the World Bank, in contrast to Christine Lagarde’s recently expressed views, commented that in hos personal believe the UK would benefit in the long term coming out of the EU.
Earnings season starts for the first quarter starts on Monday with Alcoa and then as the week progresses we get the US banking sector starting to report earnings. The sector has not had a good start to the year, and these earnings reports could well influence the broader market.
Other pieces of economic data that could catch investor’s eyes this week will be the release of Q1 Chinese GDP on Friday. Expectations are for the year on year rate to be at 6.8%. For the UK on Tuesday we get the latest inflation data for March and on Thursday the latest interest rate decision and meeting from the minutes of the last Monetary Policy Committee meeting.