Daily Market Update 5 April 2013 - A wild night, with more set to come
As expected, the European Central Bank (ECB) kept their key refinancing rate steady at 0.75% overnight. At the accompanying press conference<http://www.ecb.int/press/pressconf/2013/html/is130404.en.html>, ECB Chief Mario Draghi struck a decidedly dovish tone, telling reporters that “the economic outlook remains subject to downside risks… including the possibility of even weaker than expected domestic demand and slow or insufficient implementation of structural reforms in the euro area” although risks to the outlook for price developments continued to be “broadly balanced over the medium term”. For all the other parts of Draghi’s press conference, including some interesting insights on the recent Cyprus ‘bail in’, you can watch the full video by clicking here<http://www.ecb.int/press/tvservices/webcast/html/webcast_130404.en.html>.
Lost in the noise of the BoJ and ECB policy announcements, the Bank of England MPC left policy unchanged<http://www.bankofengland.co.uk/publications/Pages/news/2013/004.aspx> overnight with the key overnight rate and asset purchase plan remaining at 0.5% and £375bn respectively. There was no statement released along with the decision meaning specific details won’t be known until the meeting minutes are released on April 17.
Hot on the heels of unimpressive employment numbers in the ADP and ISM survey’s on Wednesday, the US labour market continued to splutter overnight with jobless claims surging<http://www.dol.gov/opa/media/press/eta/ui/current.htm> by 28k to 385k. The result was well above the 350k pace that had been expected by the markets and was the highest level seen since November 2012.
Eurozone service sector activity contracted at a faster-than-expected pace in March with Markit’s PMI gauge<http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10945> falling to 46.4. The result was slightly below the 46.5 ‘flash’ reading released midway through last month and 47.9 figure of February with worse-than-expected data for Europe’s ‘core’, Germany<http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10968> and France<http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10970>, completely offsetting modest improvements in the Spanish<http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10965> and Italian<http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=10964> numbers.