Few Important Key Figures This Week

(21.02.2011) U.S. stock market indices ended once again the week with gains, Treasury yields increased and the EURUSD increased.

By Kyrre Magnussen, Senior Economist at DNB Markets

DNB markets dealingroom in osloThe S&P 500 has increased almost 30 per cent from the start of September. From the March 2009 lows, the index has doubled its level. This is the quickest 100 per cent jump since the Great Depression according to Reuters. Weak volumes may be a signal of a tired run. Treasury yields increased a couple of basis points but remained in the recent trading range. The Euro has gained 0.6 per cent versus the USD from Friday morning. The Norwegian Krone is roughly unchanged against the Euro, but the Swedish Krona has fallen 0.7 per cent versus the Euro.

After German Axel Weber announced he will step back as Bundesbank governor, Italian Lorenzo Bini Smaghi seems to undertake the position as the hawkish ECB council member. Both on Friday and today in Hong Kong said that higher-than-expected inflation is a concern and that food prices may be permanent. He also said that the ECB is ready to raise interest rates as needed to counter inflationary pressure. According to Reuters the EURUSD increase after the statements.

Friday's key figures were mixed. In UK the retail sales increased substantially in January, far more then expected. The increase was partly a catch up from the decline in December due to snowy weather, and December's decline was revised down. Some of the increase may also reflect wishes to purchase goods before the VAT increases had affected prices. Purchases seemed to slow toward the end of the month. The pound strengthened a bit after the figures.

In France the INSEE index fell in February, against expectations for an increase. However, the index remains at a relatively high level due to strong growth last month and points toward further increase in production.

In Sweden home prices growth rate fell, from 9.2 per cent y/y in December to 6.2 per cent in January. The monthly increase was lower this January compared the earlier years. This might indicate that the Riksbank's recent rate hikes have started to calm the housing market. At the last MPC-meeting the Riksbank seem less concerned about the home prices and household's debt increases.

In China the central bank (PBC) said Friday it once again would raise lenders' required reserves by 50 basis points, the second time this year and the eighth official increase since the start og last year. For the largest banks the required reserves will now reach 19.5 per cent.

Today Reuters releases the PMI-indices for the Euro zone, both total and most member countries. According to Reuters, the median forecasts are for modest increases in the major indices. Germany will release the February IFO index. Analysts seem to expect a more or less unchanged IFO index. USA most markets are closed due to President's Day.

On Tuesday the US consumer confidence and Case-Shiller home price index are the most important key figures. On Wednesday Statistics Norway releases the monthly LFS unemployment and employment figures for December. Also this day Bank of England released the minutes for the last MPC-meeting. Thursday US orders and new home sales figures will be released and Friday Norwegian NAV releases registered unemployment figures. None of these figures are expected to be significant market movers, except for the IFO-index and BoE minutes.