A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

March 30, 2015

"There is nothing in container numbers that suggest the global economy is on the verge of starting a new growth trend"

— Søren Skou, CEO of Maersk Line, the world’s largest container shipping company

The week in review...

United States

Research spending: Betting on innovation Corporate spending on R&D rose 6.7% in 2014, almost twice the previous year's gain and the biggest advance since 1996, according to the Department of Commerce. The uptick could eventually boost productivity and capital spending as projects turn into products – a welcome development; meanwhile orders for non-military capital goods ex aircraft, a proxy for future capital spending, slumped 1.4% in February, the sixth straight decrease, the longest stretch since 2012.

Core inflation: Breath of life? Core consumer prices, not counting energy and food, rose 0.2% in February month-over-month (M/m) – just slightly higher than forecasts, but enough ease fears of deflation. Year over year, core CPI rose 1.7%, in line with forecasts and slightly higher than January's 1.6% Y/y number. The Fed's favorite inflation measure, so-called PCE core prices, rose 0.1% in January, the most recent figure available. 

Housing: Pickup at the margin Purchases of new homes, about 7% of the residential housing market, rose much more than expected(+ 7.8% M/m), for an annualized pace of 539k for February — the best pace since Feb 2008, despite poor weather and stronger property prices. The supply of homes available for sale was 4.7 months, the lowest since June 2013.


China: Manufacturing slows, more reforms begin. The preliminary figure for March manufacturing PMI (from a private-sector survey) was 49.2, indicating a slight contraction, the lowest reading since April 2014. Both output and input prices continued to decrease, suggesting continued industrial deflation. Meanwhile, the central government approved plans for new experimental Free Trade Zones (FTZ) in Guangdong, Tianjin and Fujian, more than a year after the successful launch of the Shanghai FTZ in September 2013. FTZs are test beds for reform policies intended to "better integrate the economy with international practices".

Japan: Pricing strength in services The February producer price index for services rose 3.3% Y/y, up for the 20th month in a row, led by the tourism and temporary staffing sectors.


Eurozone: Brightening mood Consumer confidence was higher in March than at any time since July 2007, according to a monthly European Commission survey. Possible causes: falling oil prices and hopes for results from the start of the ECB's long-awaited bond-buying program. The hope: rising confidence will result in increased consumer spending, kicking off a virtuous circle of growth.

UK inflation: Zero is better than nothing February's headline annual inflation rate fell to 0%, a record low, from January's 0.3%. Much credit goes to falling energy prices, according to the Bank of England – which reaffirmed its reluctance to cut rates to boost inflation. Core inflation, which excludes food and energy, slowed to 1.2% Y/y vs. January's 1.4%.

Signs of the times:

Merkel and Tsipras in Bid to Defuse Tensions as Cash Fears Rise – Financial Times

U.K. Retail Sales Rise More Than Forecast as Prices Slump – Bloomberg

Euro-Area Bank Lending Posts Longest Rising Streak Since 2011 – Bloomberg

Home Prices Are Surging 13 Times Faster Than Americans' Wages – Bloomberg

Singapore, the Nation That Lee Kuan Yew Built, Questions Its Direction – New York Times

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, China Daily, Xinhua, Deutsche Welle,

...The week ahead:

GLOBAL ECONOMIC CALENDAR: March 29–April 4, 2015



Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Mar 29



France: local elections


Mar 30

Personal spending, pending home sales


Eurozone: economic confidence
Germany: inflation

Japan: industrial output

Mar 31

Consumer confidence, home prices


Iran: nuclear deal deadline

Hong Kong: retail sales
Japan: wages

Apr 1

Manufacturing, employment



China: manufacturing PMI

Apr 2

Jobless claims, factory orders, trade balance, job cuts



Japan:  household inflation

Apr 3

Jobs report



China: services PMI

Apr 4






The Personal Consumption Expenditures (PCE) Price Index is a measure of price changes in consumer goods and services; the measure includes data pertaining to durables, non-durables and services. This index takes consumers' changing consumption due to prices into account, whereas the Consumer Price Index uses a fixed basket of goods with weightings that do not change over time. Core PCE excludes food & energy prices.

The Consumer Price Index (CPI) measures the average change in U.S. consumer prices over time in a fixed market basket of goods and services determined by the U.S. Bureau of Labor Statistics.

The Core Consumer Price Index (Core CPI) excludes the prices of food and energy, which are volatile on a monthly basis, from the basket of goods used to determine the CPI.

A producer price index (PPI) is an inflationary indicator measuring wholesale price levels.

The European Central Bank (ECB) is responsible for the monetary system of the European Union (EU) and the euro currency.
Purchasing Managers Indexes (PMI) measure the manufacturing and services sectors in an economy, based on survey data collected from a representative panel of manufacturing and services firms. PMI greater than 50 indicated economic expansion; below 50, contraction.

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Previous Editions

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Will the current wave of central bank easing jump-start the world's economies?


Will the current wave of central bank easing jump-start the world's economies?

No - The real issues are structural - real progress on labor reform and regulatory excess will have more impact
No - Deflation is already taking hold, making monetary policy changes ineffective
Yes - The US model shows that monetary easing can help economies heal in the medium term
Yes, but it will take even  longer than it did in the US, and the delay will have a negative political impact

Previous month Poll

What would be the best news for markets for the remainder of the year?

Strong US corporate earnings validate US economic expansion
Strength in the US dollar convinces the Fed to keep short rates low longer
European Central Bank bond buying rekindles growth in European Union countries
Growth in China strong enough to leave room for financial system and structural reform