NOTABLE MOVES
As of Fri, Mar 8, Singapore Time zone UTC+8
USDJPY, -0.11%, $111.64
EURUSD, -0.96%, $1.1199
GBPUSD, -0.60%, $1.3091
USDCAD, +0.02%, $1.3444
AUDUSD, -0.14%, $0.7024
NZDUSD, -0.06%, $0.6765
S&P500, -0.81%, 2,748.93
Nasdaq, -1.20%, 7,026.88
Nikkei Futures, -2.08%, 21,140.0
CURRENCY MARKET WRAP
- Initial claims for the week ending March 2 were low at 223,000 (consensus 224,000), as expected, while continuing claims for the week ending February 23 fell by 50,000 to 1.755 million.The key takeaway from the report is that the low level of initial claims is consistent with prior readings that have been consistent with the understanding that labor market conditions remain tight.
- Nonfarm business sector labor productivity increased 1.9% (consensus 1.7%) in the fourth quarter. Unit labor costs increased 2.0% (consensus 1.5%).The key takeaway from the report is that the annual average productivity from 2017 to 2018 was a lowly 1.3%, which is below the long-term rate of 2.1%.
- The European Central Bank issued a dovish policy stance, which was an acknowledgement of the slowing growth in the eurozone.
- The ECB left its key interest rates unchanged (0.00%), but it also (1) pushed out its guidance for rates to stay at their present level at least through the end of 2019, versus prior guidance of at least through the summer of 2019; and (2) reintroduced a targeted long-term refinancing operation (TLTRO) that will begin in September 2019 and continue through March 2021. At the same time, the ECB cut its real GDP growth forecast for 2019 to 1.1% from the 1.7% growth forecast it provided as recently as December. Euro was heavily offered in the aftermath, with Italy in recession, Germany flirting with negative growth, Britain at risk of a no-deal Brexit and the global economy slowing as a result of protectionism, the central bank felt that it was necessary to be accomodative.
STOCK MARKET WRAP
- The S&P 500 lost 0.8% on Thursday, as a negative economic outlook from the European Central Bank (ECB) helped fuel growth concerns and profit-taking interest. Thursday’s risk-off mindset was made apparent by the underperformance of cyclical sectors and the flight-to-safety trade in the U.S. Treasury market where the 10-yr yield dropped six basis points to 2.64%.
- 10 of the 11 S&P 500 sectors finished lower with consumer discretionary (-1.4%), financials (-1.1%), and information technology (-0.9%) leading the retreat. Conversely, the utilities sector (+0.3%) was the lone group to finish higher.