Daily Market Outlook – Thursday, March 14

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 In response to mixed signals from global markets, Asian stock markets are also experiencing mixed trading on Thursday. Traders are exercising caution and staying on the sidelines as they await key U.S. retail sales, producer price inflation, and weekly jobless claims data later in the day, which could provide further insight into the outlook for interest rates. Although consumer inflation was slightly higher than expected, there remains optimism that the US Fed will reduce interest rates in June. The upcoming monetary policy meeting on March 19 and 20 will be closely monitored for any indications of potential timing for a rate cut. Continuing its decline from the last three sessions, the Japanese market is slightly down in volatile trading on Thursday, in response to the mixed signals from global markets overnight. The Nikkei 225 is approaching the 38.6k handle.The overnight release of the RICS residential market survey offered further indication of improving sentiment in the UK housing market. The survey reported a net balance of estate agents indicating higher house prices at -10% in February, compared to -19% the previous month. Though still negative, this marks the sixth consecutive monthly rise. Additionally, the survey showed a positive net balance of 6% for new buyer enquiries, unchanged from last month and the joint highest in two years.Today, there are no other major UK data releases on the docket, with attention shifting to this afternoon’s US data and several ECB speakers scheduled throughout the day,while a first ECB rate cut in April has not been entirely dismissed, indications point towards June being the more probable option. This timing would afford policymakers additional data about the economy, including Q1 wage data, enabling a more informed decision-making process. Economic growth resilience and inflation prospects remain the focal points for Fed policymakers as well they deliberate on when to initiate interest rate cuts. Earlier this week, February CPI inflation data came in with a 0.4% month-on-month rise in the core measure (excluding energy and food), surpassing consensus expectations for the second consecutive month. Unexpectedly, the year-on-year comparison saw headline CPI rising to 3.2% from 3.1%. Today’s producer price inflation data will offer insights into pipeline price pressures, look for an above-consensus month-on-month rise of 0.4% for the core measure.Markets will also seek signs of a rebound in US economic activity following a generally weak start to the year attributed to temporary weather conditions and residual seasonal adjustment issues. Look for US retail sales to recover in February following a downside surprise in January, with a 0.7% month-on-month increase in headline retail sales, driven by higher auto sales and gasoline prices, alongside a 0.5% month-on-month rise in the core ‘control group’ measure, indicating a pickup in high-street sales. Overall it looks like US inflation and activity data will support delaying the first Fed rate cut until the middle of the year.
 Overnight Newswire Updates of Note

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
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