Here is what you need to know.
A Lufthansa flight has crashed in the south of France. A plane operated by GermanWings flying from Barcelona, Spain to Dusseldorf, Germany with 142 passengers, 2 pilots and 4 crew went down in the Digne Region of France. The story is still developing.
China’s manufacturing sector is contracting. The reading HSBC flash manufacturing PMI slipped to 49.2, missing the 50.2 that was expected. The manufacturing sector is at an 11-month low and back in contraction (50 is expansion/contraction line) following two months of expansion. China’s yuan gained 0.1% to 6.2056 per dollar.
Time is running out on Greece. Greek Prime Minister Alexis Tsipras was in Berlin, but it was unclear as if the discussions produced anything meaningful. The Greek government has one week to unveil its new list of reforms to its creditors before it runs out of cash. Separately, billionaire George Soros said he believes there is a 50% chance Greece will exit the euro. Greece’s 3-year yield is down 142 basis points at 19.90 %.
Europe’s pace of growth is at a four-year high. Strong manufacturing and services readings from Germany provided support to the region while weakness in France was notable. French manufacturing PMI edged up to 48.2, but still missed the 48.9 that was expected. The reading has held in contraction for 10 of the past 12 months. As for services, today’s reading printed 52.8 on expectations of 53.1 and showed some give back after the big jump the previous month. The euro is up 0.4% at $US1.0990.
The UK has no inflation. UK inflation for February posted a 0.0% year-over-year reading, missing the 0.1% YoY that was expected. According to data from the Office for National Statistics, today’s reading was the lowest since March 1960. Inflation in the UK has been running below the Bank of England’s 2% target since December 2013. Great Britain’s pound is off 0.2% at $US1.4925.
Spain’s prime minister will not resign after a special court ruled his party operated a secret slush fund. Prime Minister Mariano Rajoy’s People’s Party ran a secret slush fund for 18 years. The party’s former treasurer, Luis Barcenas, has been ordered to stand trial and face charges of tax fraud and embezzlement. Spain’s 10-year yield is unchanged at 1.25%.
Japan is shunning China’s infrastructure bank. Japanese Prime Minister Taro Aso expressed interest in joining the China-backed Asian Infrastructure Investment Bank, but said his government would not be ready to commit by the March 31 deadline due to a lack of transparency. Aso stated, “The AIIB is not transparent and nothing has been decided as to who is (involved), where to decide an executive board and who will examine” the loans. Japan’s yen is stronger by 0.3% at 119.35 per dollar.
San Fransisco Fed President John Williams says the Fed should hike rates mid-year. Speaking in Sydney, Australia, Williams suggested economic conditions in the US were “downright good,” and that he believes, “We will be starting to raise interest rates this year and we will be moving them gradually over the next couple of years to more normal levels.” The US 10-year yield is lower by 1 basis point at 1.90%.
Global stock markets are mostly higher. Italy’s MIB (+0.8%) leads the advance in Europe while Australia’s ASX (+0.2%) paced the gains in overnight action. China’s Shanghai Composite finished flat. S&P 500 futures are up 3 points.
US economic data is moderate. CPI will cross the wires at 8:30 a.m. ET while FHFA Housing Price Index is set for 9 a.m. ET and new home sales is due out at 10 a.m. ET. The US Dollar Index is down 0.3% at 96.75.
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