MARKET REPORT FRIDAY 7th MARCH
Good Morning,
A busy day in the markets yesterday saw the Bank of England hold Interest Rates at 5.25% causing
Thursday’s most important announcement came from the ECB which also held interest rates, at 4%. In the press conference that followed ECB President Trichet reinforced the ECB’s direct focus on inflation trends, which it would want to see improving before it contemplated any interest rate cuts. Trichet’s remarks highlighted the widening difference in strategy between the Euro-zone and the US Federal Reserve and bolstered market sentiment on the strength of the Eurozone economy.
President Trichet’s comments that the ECB is unlikely to achieve its annual inflation target of 2% dampened any expectations of potential ECB interest rate cuts in the coming year. Market reaction saw the Euro climb to new highs against the US dollar: a situation which was exacerbated by weaker than expected US Pending Housing figures.
Friday’s market focus will be on the US Employment Report for February at 13.30 (GMT), when the US Labour Department announces Non-Farm payrolls and the unemployment rate. With analysts forecasting only 25,000 new jobs, created and the unemployment rate pushing up to 5.0%
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