The S&P500 index rose 0.7%

Market movers today

• We have a light calendar in terms of data releases and markets could be in wait-andsee mode ahead of the ECB meeting tomorrow and the US job report on Friday.

• The ADP employment report in the US could get some attention. It has generally been more stable than the non-farm payrolls and may be a better indicator of the true state of the labour market. Consensus is for an increase of 195K in March.

• On the agenda at the Ecofin meeting today is the EU banking union. Moreover, the European politicians will discuss financial assistance for Ukraine. The US House has cleared loan guarantees of USD1bn to Ukraine and imposed sanctions against those deemed responsible for undermining Ukraine’s sovereignty.

• Fed’s Lockhart (hawkish) and Bullard (dovish) speak today. Two days ago Fed Chairman Janet Yellen did all she could to sound dovish after the market had interpreted her comments at the Fed press briefing as rather hawkish.

• In the Scandi markets it will be worth keeping an eye on the Danish central bank's currency reserve data for March. The krone is still relatively weak against the euro and has been trading as high as 7.4670 in March, a level that has previously prompted the central bank to intervene.

Selected market news

Market sentiment remains positive this morning with most Asian stocks higher. In Japan the Nikkei 225 is up 1.7% helped by a weakening of the yen. Yesterday, the S&P500 index rose 0.7% and closed at a record high while the 10-year US Treasury yield also increased to 2.77%. The movements were supported by the ISM manufacturing report, which included quite upbeat comments. Later in the evening March data for new car sales in the US showed the highest increase since November. Goods consumption in the US has been very weak in the beginning of the year and there is a big gap to be closed.

ECB vice president Constancio made some hawkish comments yesterday and our close call for more easing on Thursday now looks even closer. Related to inflation he said the ECB expects ‘the low figure of inflation in March will be corrected to a high figure already in April’. Regarding the recovery he described it as weak ‘but it’s a recovery’. These comments two days ahead of the ECB meeting are very important and indicate that the decline to a new cycle low in inflation is not enough to tilt the balance of the Governing Council in favour of more easing. Although it looks less likely that the ECB will decide to ease on Thursday, there is still some probability of this, as the ECB could be concerned about the decline in wage growth to a level near the one in 2009.

In the euro area the discussion about austerity measures is back on the agenda. This followed after France’s President Hollande made it clear he wants a delay in meeting targets for the budget deficit to allow room for his new growth plan.