Weak Data From France And Germany And Italy Credit Ratings Downgrade

And so the trading week has kicked off with the reactions to the surprising US jobs data that was released at the end of last week. The data which beat expectations of 160,000, by the addition of a further 236,000 jobs in February managed to bring the unemployment level down to 7.7 per cent from 7.9 per cent in January, its lowest level since Dec 2008 and the start of the financial crisis.

A trying morning in Europe with weak data emerging from France and Germany and Italy having its credit rating downgraded. French Industrial Production dropped by 0.1 per cent in Jan against expectations of a 0.1 per cent rise. This follows the previous month which also dropped by 0.1per cent.

Meanwhile data coming from Germany showed a trade surplus contraction to E15.7billion EUR following December’s figure of E16.9 billion.

Fitch the credit rating Agency downgraded Italy’s government bond rating from A- to BBB+.

This morning in Asian trading we saw the markets reacting to the Chinese inflation level which is at a ten-month high. CPI data gained 3.2per cent from the year before with food prices increasing by 6 per cent. If the consumer prices continue to rise the Government will have to interject and potentially tightly control their money closer which of course could hurt the future growth over there. Last year China grew at a level of 7.8per cent its lowest level in 13 years.

Stocks
This morning, the Nikkei 225 in Japan touched its highest point since Sept 2008. It closed at 0.53 per cent up. The ASX/S7P 200 in Australia also gained, it rose 0.46per cent closer to touching levels of Sept 2008 itself.

Eurozone stocks fell this morning in European trading after the release of weak data from France and Germany and after Italy has its credit rating downgraded by Fitch. EURO STOXX 50 fell by 0.49 per cent, the French CAC 40 dropped 0.33 per cent and the German DAX lost 0.15 per cent. Data from France has shown that Industrial Production has declined by 1.2 per cent in Jan, against expectation an of 0.1 per cent increase and a drop of 0.1 per cent the previous month.

Forex
Not much movement in Asian trading with the currency markets. The British pound which had a fantastic year in 2012 and has been taking a beating of late, managed to regain some losses with a rise of 0.08 per cent against the EUR. It also rose against the USD with a 010 per cent increase. The USD was suffering in Asian trading with a drop of 0.14 per cent against Euro and 0.14 per cent against the CHF.

Commodities
Investors that stepped away from the weakening dollar moved over to the nicely-priced metals. Gold increased by 0.23 per cent, and Silver by 0.21 per cent. Meanwhile crude oil lost its value as news came out of Saudi Arabia that the country is planning to up its level of production therefore allowing greater supply.