Market Action

• U.S. markets closed out the month of February with one of the best months in the past few years, coming off a disappointing January. All sectors, save for the interest sensitive utilities, rose for the month.
• After agreeing to a deal with the Eurogroup last Friday Greece submitted reforms on Monday in order to maintain emergency financing from drying up. Billions in deposits have left Greece in the past couple of weeks but signs point to funds returning this week. The Dow and S&P hit record highs the next day.
• European data showed noticeable improvement this week. Consumer confidence, money supply growth and more came in stronger than expected, boosting equities. With QE set to commence this month bond yields have been falling across the continent with Germany selling 5-year notes with a negative yield this week.
• U.S. data, particularly in housing, has not inspired significant confidence to the start of 2015. Housing sales are weak to start the year and the trend seems to support more demand for higher end housing as opposed to the middle class market. Earnings guidance for Q1 has also caused concerns.
• After announcing last week that the country clawed out of recession Japan reported strong export and production numbers this week. Retail sales have been poor however with the weak Yen likely to blame.
• China saw a marked increase in their SHIBOR funding rate this week, sparking renewed concerns about shadow banking risks.
• Petrobras, the Brazilian oil giant, had its debt pushed further into junk territory this week. The firm also announced asset sales as no end is in sight for the company’s corruption scandal.
• India forecasts economic growth of 8% this year.
• Fed Chair Yellen testified to Congress this week. Her foggy language was largely taken in a dovish manner by the markets as she backed away from a firm timetable for raising interest rates.

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