Oil rises despite weak economic data

US stocks closed lower on Monday despite higher oil prices. The dollar strengthened, live dollar index data indicate the ICE US Dollar Index, a measure of the dollar’s value against a basket of six major currencies, rose 0.2% to 98.324. The Dow Jones Industrial Average slid 0.3% to 16588, weighed by a 0.8% loss in JP Morgan shares. The S&P 500 fell 0.8% to 1932.22 with nine of the ten major sectors closing in the red, led by 1.58% decline in healthcare stocks. Disappointing economic data undermined investor confidence: Chicago area manufacturing activity index fell below 50, signaling contraction, and a survey of Dallas area activity came in much weaker than expected. Weak data came after strong readings of fourth quarter GDP growth, inflation and consumer spending last Friday. Today at 15:45 CET final reading of February Manufacturing PMI will be released by Markit. At 16:00 CET February ISM Manufacturing PMI, Prices Paid and Construction Spending for January will be published. The tentative outlook is positive.
European stocks ended higher on Monday after China’s central bank lowered the required reserves ratio by 50 basis points to provide more stimulus for the slowing economy. The euro weakened following weak inflation reading from the euro-zone: inflation fell to minus 0.2% in February after a 0.3% rise in January. The Stoxx Europe 600 closed up 0.7% bolstered also by expectations that the European Central Bank will expand its monetary stimulus program later this month. However Germany's DAX 30 lost 0.2% settling at 9495.40. France's CAC 40 gained 0.9% and UK’s FTSE 100 edged up less than 0.1%. Today at 09:55 CET German Unemployment Change and Unemployment Rate for February will be published in euro-zone. The tentative outlook is neutral. At 10:30 CET Markit Manufacturing PMI for February will be released in UK. The tentative outlook is negative. And At 11:00 CET January euro-zone Unemployment Rate will be released. The tentative outlook is neutral.
Asian stocks are advancing today as investor optimism was buoyed by China central bank’s fresh monetary stimulus measure overnight despite weak manufacturing reports today: manufacturing activity in China contracted for a seventh straight month in February according to both official and Caixin PMI reports. The drop was sharper than expected, but the services sector continued to expand. Chinese stocks are rising today with Shanghai Composite Index up 1.7%. Nikkei closed 0.4% higher today erasing early losses as yen weakened against the dollar.
Oil futures prices are rising today after closing higher on Monday as declining US active oil rig numbers and the tentative agreement between major producers to freeze output spurred expectations of easing of the current oversupply. April WTI rose 3% to $33.75 a barrel on the New York Mercantile Exchange, while Brent gained 2.5% to $35.97 a barrel on London’s ICE Futures exchange. US official data showed crude output last December fell for a third straight month by 43000 barrels per day (bpd) to 9.26 million bpd to lowest in a year, and active oil rig count dropped by 13 to 400 for a tenth straight week. The clearing of the current glut is expected to take time though as slowing global demand growth, evidenced by weak economic data from China, will be offsetting declines in output.