Markets opened lower aided by weaker oil prices over concerns of weakening global demand as well as economic growth slowdown. This was heightened by data released from Germany after industrial orders were lower than expected by a large margin today, German Factory Orders WDA Y/Y – 0.5% Vs. 2.2% exp. and German Factory Orders M/M -1.2% Vs. 0.3% exp, suggesting that the global slowdown is taking it’s toll on larger economies in the Eurozone. FTSE 100 is down 1.15% and DAX is leading the pack down 2.12%.
UK News
BP (LON:BP) – A U.S. federal judge granted final approval to the Co’s $18.7B civil settlement with U.S. authorities over its 2010 Gulf of Mexico oil spill.
AA Limited posted FY (to end-January) results stating overall revenue reduced 0.4% to £963M. Group Trading EBITDA reduced 3.3% to £415M. Profit after tax was £6M (2015: £69M) after a net cost of £85m relating to the refinancing. The Board has recommended total dividends in respect of the 2016 financial year of 9p per share (2015: Nil) including the interim dividend of 3.5p already paid.
Tate & Lyle (LON:TATE) issued a trading statement: “Tate & Lyle confirms that trading performance for the fourth quarter of the year ended 31 March 2016 was in line with both expectations and the outlook included in the trading statement of 11 February 2016.”
Global News
In Asia stocks and other riskier assets decreased on Tuesday, pressured by falling crude oil prices and mixed messages from Federal Reserve policymakers on the outlook for U.S. interest rate rises. The Nikkei fell 2.1% to 15,789.97 in midmorning trade after hitting as low as 15,758.41 earlier, the lowest level since Feb. 24. Inpex Corp. (T:1605) lost 4.5% and Japan Petroleum Exploration Co declined 2.3% after crude oil prices fell in early Asian trading on signs of weakening gasoline demand.
In Currency Markets the dollar saw losses against the yen and euro on Tuesday. The dollar was down 0.4% at 110.87 yen and the euro was up 0.1% at $1.1399. The Australian dollar nudged up 0.3% to $0.7623 after the Reserve Bank of Australia left its cash rate unchanged at a record low 2% as widely expected.
Oil prices extended losses from the previous two sessions on weakening demand for gasoline and on concerns the global crude glut could persist for some time. Front month U.S. WTI crude futures were trading at $35.54 per barrel, down 16 cents from their last settlement. International Brent futures were down 11 cents at $37.58 a barrel. Tuesday’s declines came after U.S. gasoline demand during January fell for the first time in 14 months, while overall U.S. oil demand fell 1% that month from a year ago. The EIA said U.S. gasoline stocks likely fell 1.6 million barrels and distillate stocks likely declined by 1 million barrels in the same week.
In US Equity Markets stocks ended weaker on Monday, pulling back from a recent rally that took them to new 2016 highs, as losses in commodity-related and industrial stocks offset gains in healthcare. The S&P 500 lost 0.32%, to 2,066.13. After the bell, shares of Allergan Plc (NYSE:AGN) fell 19.3% following news of the U.S. Treasury Department’s new steps to curb tax-avoiding inversion deals in which a U.S. company reincorporates overseas after the purchase of a foreign company. Dublin-based Allergan has agreed to be bought by Pfizer Inc (NYSE:PFE) in the biggest inversion deal ever. Shares of Pfizer were up 2.5% in after-hours trading.
Economic Calendar
GE 08:00: Feb Factory Orders MoM, exp.: 0.3%
FR 09:50: Mar F Markit France Services PMI, exp.: 51.2
FR 09:50: Mar F Markit France Composite PMI, exp.: 51.1
GE 09:55: Mar F Markit Germany Services PMI, exp.: 55.5
GE 09:55: Mar F Markit/BME Germany Composite PMI, exp.: 54.1
EC 10:00: Mar F Markit Eurozone Services PMI, exp.: 54
EC 10:00: Mar F Markit Eurozone Composite PMI, exp.: 53.7
UK 10:30: Mar Official Reserves Changes
UK 10:30: Mar Markit/CIPS UK Services PMI, exp.: 53.5
UK 10:30: Mar Markit/CIPS UK Composite PMI, exp.: 53.4
EC 11:00: Feb Retail Sales MoM, exp.: 0%
US 14:30: Feb Trade Balance, exp.: -$46.2B
US 15:45: Mar F Markit US Services PMI, exp.: 51.2
US 15:45: Mar F Markit US Composite PMI
US 16:00: Mar ISM Non-Manf. Composite, exp.: 54.1
US 16:00: Apr IBD/TIPP Economic Optimism, exp.: 47.5
US 16:00: Feb JOLTS Job Openings
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