Euro Area Inflation Rate Turns Negative
Consumer prices in the Euro Area decreased 0.2 percent year-on-year in February of 2016, following a 0.3 percent rise in the previous month and lower than market expectations, preliminary estimates showed. The inflation rate turned negative for the first time in five months, falling the most in a year as oil prices weight.
Prices in the euro zone fell in February, falling short of already depressed expectations and virtually ensuring another round of policy easing from the European Central Bank on March 10.
Combined with weak sentiment and output data, the dismal inflation figures suggest that the bloc’s tepid growth is slowing, adding to calls for fiscal and monetary policy action to prop up an economy that has yet to grow back to its pre-crisis size.
More alarmingly for the ECB, core inflation excluding volatile food and energy prices, dipped to 0.8 percent from 1 percent, suggesting that low oil prices are feeding into the price of other goods and services, creating a so-called second round effect that could entrench low inflation and lead to deflation.
Greek Retail Post 1st Rise in 7 Months
Retail Sales in Greece increased 0.4 percent year-on-year in December of 2015, following a 4.4 percent drop in the previous month. It is the first rise since May as sales in the non-food sector rose 6.6 percent and in automotive fuel went up 3.3 percent while sales in the food sector fell 4.6 percent. In 2015, retail sales on average decreased 1.4 percent.
Portugal Q4 GDP Growth Confirmed at 0.2%
The Portuguese economy advanced 0.2 percent on quarter in the three months to December of 2015 following an upwardly revised 0.1 percent growth in the previous period and matching preliminary estimates. While net external demand expanded, domestic demand contracted mainly due to a reduction of investment, final figures showed. Year-on-year, the economy advanced 1.3 percent.
European Markets Trade Lower
European equities were falling on Monday following sharp losses in Asia as investors were disappointed by a lack of specific measures to boost growth during the G20 meetings in Shanghai. The FTSE 100 lost 0.59%, the Dax went down 1.16%, the CAC 40 fell 0.68%, the Ibex 35 was 0.61% lower and the FTSE MIB dropped 0.73% around 10:30 AM London time.
Asian Stocks Fall on Monday
Most Asian shares finished in the red on Monday, following disappointing commitments to spur global growth from G20 finance ministers and after the PBoC lowered the yuan for the fifth straight session.
The Shanghai Composite Index fell 2.85%,
The Nikkei 225 declined 1%,
The Hang Seng decreased 1.3%,
the Kospi edged down 0.18% while the S&P/ASX 200 ended near the flatline.
Turkey Economic Confidence Index at Record Low
Turkey’s economic confidence index decreased sharply by 14.8 percent month-over-month to 71.46 points in February of 2016 from 83.88 points in January. It was the lowest value on record, as confidence among consumers, services, retail trade, construction and manufacturing decreased firmly.
Italy Returns to Deflation in February
Consumer prices in Italy are expected to decrease by 0.3 percent year-on-year in February of 2016 compared to a 0.3 percent growth in the previous month while missing market expectations of 0.1 percent fall. It was the first annual fall since April last year, as prices of energy, unprocessed food and services related to transport dropped. On a monthly basis, consumer prices declined by 0.2 percent.
- UK Consumer Credit Up 9.1% YoY
Net lending to consumers in the United Kingdom rose 9.1 percent year-on-year in January of 2016 to GBP 1564 billion, the biggest gain since January of 2006 and higher than market expectations. Within consumer credit, credit card lending increased by GBP 0.5 billion to GBP 63.8 billion, broadly in line with the average over the previous six months. Other loans and advances increased by GBP 1.1 billion to GBP 115.7 billion, compared to the average monthly increase of GBP 0.9 billion over the previous six months.
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- UK Mortgage Approvals at 2-Year High
The number of loan approvals for house purchase in the United Kingdom increased to 74.58 thousand in January of 2016, higher than an upwardly revised 71.33 thousand in December and an average of 70.22 over the previous six months. It is the highest figure since January of 2014 and better than market expectations. The number of approvals for remortgaging was 42,22, compared to the average of 40,30 over the previous six months and the number of approvals for other purposes was 11,900, in line with the average. Mortgage lending increased by GBP 3.7 billion, higher than GBP 3.2 billion in December.
- Spanish Business Morale Worsens in February
Business confidence in Spain decreased to -2.2 in February of 2016 from a downwardly revised -1.8 in January. It was the lowest level since October last year, due to the situation of the backlog (-6 points from -5.9) and stocks of finished goods level (7 points from 4.3). By contrast, production expectations remained in positive territory (6.3 points from 4.6).
- Russian GDP Contracts 2.5% in January
The Russian economy shrank 2.5 percent year-on-year in January of 2016, following a 3.5 percent drop in the previous month. It was the smallest contraction since February of 2015. On a seasonally adjusted monthly basis, the GDP fell 0.1 percent.
- Swiss KOF Indicator Highest Since May 2015
Switzerland’s leading KOF economic barometer increased to 102.4 in February of 2016 from an upwardly revised 100.4 in January and staying way above market expectations of 98.8. It was the highest value since May last year, as the expected performance of the Swiss economy in about six months’ time improved.
- Australia Business Inventories Decline for 1st Time in A Year
Business inventories in Australia dropped by 0.40 percent month-on-month in the December quarter of 2015, reversing from a 0.1 percent increase in the previous three months and missing market expectations of a 0.2 percent rise. It is the first decline since the fourth quarter 2014. Year-on-year, business inventories rose 0.2 percent.
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- Australia Corporate Profits Fall Worse than Expected in Q4
Corporate profits in Australia decreased by 2.8 percent quarter-on-quarter to 62,931 AUD million in the fourth quarter of 2015, following an upwardly revised 1.4 percent growth in the previous quarter and above market consensus of a 1.8 percent drop. Year-on-year, corporate profit dropped by 2.3 percent.