UK CPI inflation fell to 0% for the first time in February, falling from from 0.3% in January, and exceeded analysts’ consensus forecasts. The falls came as the supermarket price battles wage on and fuel prices continue to decline. Bank of England Chief Economist Andy Haldane said last week that falling inflation could necessitate a further cut in interest rates, a suggestion that Mark Carney has publicly rebuffed.
The heads of the Greek and German governments have met this week to discuss the terms of Greece’s bailout and fears that the country is running out of cash. Angela Merkel has promised that there will be no further cash without reforms, despite a recent EU pledge offering €2 billion to help resolve what it called a “humanitarian crisis”.
The stock market began the trading week on a sleepy note. The Dow Jones Industrial Average (-0.1%) and S&P 500 (-0.2%) surrendered their slim gains during the final hour while the Nasdaq Composite settled lower by 0.3% after lagging throughout the session.
Equity indices registered their second consecutive decline on Tuesday with the S&P 500 retreating 0.6%. The benchmark index ended in-line with the Dow Jones Industrial Average while the Nasdaq Composite (-0.3%) outperformed slightly.
The market registered its third consecutive decline on Wednesday with the S&P 500 ending lower by 1.5%. The benchmark index settled below its 50-day moving average (2,067) while the Nasdaq Composite (-2.0%) underperformed throughout the day.
On Thursday, equities posted modest losses after climbing off their opening lows. The market came under pressure after overnight reports revealed that coalition forces from ten countries, led by Saudi Arabia, carried out air strikes against rebel forces in Yemen. This followed Wednesday’s reports indicating Yemen’s President Hadi fled his country by sea.