In the week ended February 28, initial claims dropped by 31 000, from an upwardly revised 670 000 (from 639 000), while the consensus expected a figure of 650 000. Continuing claims, which are reported with a one-week lag, dropped from an up-wardly revised 5 120 000 to 5 106 000, while a modest increase was forecasted. Al-though slightly better than expected, there is no reason to become optimistic as both initial and continuing claims are still at record high levels.

Factory orders surprised on the upside in January. On a monthly basis, factory or-ders dropped by 1.9% M/M, while a decline of 3.5% M/M was expected. The De-cember figure was downwardly revised from -3.9% M/M to -4.9% M/M. The details show a 4.5% M/M decline in durables, while non-durables rose by 0.5% M/M. The drop in durables was led by a 9.3% M/M plunge in transportation.


EMU: Q4 GDP confirmed to have contracted by 1.5%

The preliminary report of fourth quarter GDP showed a downward revision in the year on year figure from -1.2% Y/Y to -1.3% Y/Y, while the quarterly reading stayed unchanged at -1.5% Q/Q. Looking at the breakdown, investments put a large drag on growth, falling by 2.7% Q/Q. Household spending dropped by 0.9% Q/Q and gov-ernment spending fell by 0.6% Q/Q. Another negative contribution came from net exports as exports (-7.3% Q/Q) showed a sharper drop than imports (-5.5% Q/Q), while change in inventories had a mitigating impact.

In France, unemployment rose by 187 000 in the fourth quarter of 2008, while the third quarter outcome was downwardly revised from 9 000 to -31 000. The unem-ployment rate rose from 7.6% in the third quarter of 2008 to 8.2% in the fourth, while an outcome of 7.9% was expected.


Other: BoE cuts rates by 50bps and announces programme of asset purchases

At its March meeting, the Bank of England’s Monetary Policy Committee decided to cut interest rates by 50 basis points, to 0.50%, which was in line with the consen-sus estimate. In its statement, the BoE added that UK output dropped sharply in the fourth quarter of 2008 and that business surveys continue to point to a similar rate of contraction in the early part of this year and unemployment has risen markedly. Credit conditions faced by both companies and households remain tight. As was ex-pected, the Bank announced a programme of asset purchases, in first instance, for a total amount of £75 billion, but the Chancellor gave the authorization for a total amount of £150 billion. Part of the sum would be spent on private sector asset pur-chases, but in order to meet the objective of total purchases of £75 billion; the Bank would also buy medium-and long-maturity conventional gilts in the secondary mar-ket.