Europe
The failure to find consensus over the latest set of Greek proposals at Monday’s Eurogroup meeting tempered the enthusiasm in European markets surrounding the first day of quantitative easing from the ECB. Uncertainty surrounding Greece and the latest trade data from China left European shares mixed on Monday.
The ECB turned on the taps for the first time on Monday; German bunds were the first obvious recipients sending yields lower. The German DAX recovered from early losses with shares rallying back alongside bond prices as bonds were bought by the ECB. German stocks and bonds as well as the euro have made significant moves leading into the beginning of QE so there is a risk of a pullback now that the program has started.
Jeroen Dijsselbloem, the President of the Eurogroup meeting said the proposals set out in a letter last week which included a bit more detail over what had been previously agreed were not enough to justify further aid.
This week is packed full of market-moving data from China and it got off to an uncertain start with the weekend’s release of trade data in February. Exports jumped 48.3% year-over-year while imports crashed 20.5%. The increase in exports speaks well to foreign demand in the US and Europe but the cost of oil notwithstanding, the drop in imports is a concern for domestic demand and by implication global demand.
UK
Interest rate-sensitive property stocks were some of the worst-performers in UK markets on Monday as gilt yields increased on the prospect of higher rates in the UK and the US.
The FTSE 100 remained below its all-time highs with Standard Chartered (LONDON:STAN) leading the charge on rising hopes of a turnaround under its new Chief Executive and WPP (LONDON:WPP) which reported strong annual profit and revenue growth. The index was held back by the US-sensitive Ashtead, the government-owned and bonus-enriched Royal Bank of Scotland (LONDON:RBS) and CRH (LONDON:CRH) on pre-deal jitters.
US
Stock markets in the US recovered in early trading on Monday as fears abated over the possibility of summer rate-hike and excitement grew over the unveiling of Apple’s latest surprise product announcement.
Shares of Apple were trading higher in early US trading ahead of the unveiling of what is expected to be more details on the Apple watch today.
Apple share have been a little soft running into the launch of the new watch despite the announcement shares will soon list on the Dow Jones Industrial Average. With iPad sales already falling off and Samsung (LONDON:0593xq)’s new S6 perhaps set to take the sting out of iPhone 6 sales; there are concerns the Apple watch may not be able to make up the difference. Until there is some hard data on the popularity of the watch after it goes on sale in April, Apple shares (NASDAQ:AAPL) at risk of some profit-taking.
FX
The US Dollar was mixed on Monday, losing some momentum after the gains made following Friday’s strong US jobs report.
The British pound gained ahead of a speech by Bank of England governor Mark Carney tomorrow while the Japanese yen dropped after a lower revision to Japanese fourth quarter GDP growth.
Commodities
Copper prices saw a big about-turn on Monday as mining giant Antofagasta (LONDON:ANTO) projected copper output at 5,000 tonnes lower due to a protest. Having dropped as low as $2.62/lb, prices rebounded back above $2.70 in a rally that could be setting up to take out the March 2 peak at $2.75.
Brent crude oil slipped while WTI caught a rebound on Monday after OPEC’s general secretary Abdullah al-Badri said on Sunday that the group should not “subsidise” what he termed “tight oil” namely US shale by cutting output
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