Retail sales in Denmark is due for release today

Market movers today

The US Philadelphia Fed survey is expected to rebound in March following the sharp drop in February. The number will give further input to how much activity is coming back and hence how much of the weakness in January and February was due to the weather.

Consensus expects US initial jobless claims to rise slightly to 322k following last week’s drop to 315k. The number of claims has generally been fairly robust despite the slowdown in January and February. Finally US existing home sales for February is due to be released. It fell sharply in January and is expected to be broadly flat at a low level in February as the bad weather continued in this month.

The EU will meet for a two-day summit in Brussels today to discuss whether to take additional action against Russia on the back of the conflict with Ukraine.

Retail sales in Denmark is due for release today. For more on Scandi markets see page 2.

Selected market news

In an otherwise downbeat Asian session, the Chinese stock market welcomed the announcement from the Chinese state council that it will accelerate preliminary work on key investment projects to expand domestic demand and stabilise growth.

As expected, the Federal Reserve yesterday tapered its assets purchases by another USD10bn, bringing it down to USD55bn. However, it took the markets by surprise as it revised higher-the-median projections of its expected rate path by 25bp for end-2015 (from 0.75% to 1.0%) and by 50bp for end-2016 (from 1.75% to 2.25%). The market was pricing a rate path that was even lower than what the Fed was projecting before this meeting. If anything, it reflects confidence in the US economic outlook and underlines that it takes a lot to change that perception. We expect tapering to continue at each meeting for the rest of the year as planned since December.

Ukraine will remove its military from Crimea in a move to de-escalate the conflict on the peninsula. Instead, the focus could move to the situation in the Eastern Ukraine regions of Kharkiv and Donetsk where there is risk of escalation of the conflict.

Iran and the P5+1 ended another round of talks over Iran’s nuclear programme in Vienna yesterday, positive that they will be able to reach a permanent accord before the 20 July deadline where the current interim deal expires.

Global wheat prices jumped more than 3% yesterday to the highest level in six months on worries that bad weather has hurt crops in the US. Global food prices have surged 17% this year on an unfortunate combination of extreme weather in North and South America and concerns that the conflict in Crimea may disrupt Ukraine’s grains export.

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