Daily Market Update – February 15, 2013

Top News Highlights

Federal Reserve Bank of St. Louis President James Bullard said central bank stimulus has been ramped up this year with the decision to increase outright bond purchases to $85B a month and that a growing balance sheet could be complicated to unwind. "The current stance of U.S. monetary policy is considerably easier than it was in 2012," Bullard said. "The size of the balance sheet could inhibit" the Fed's "ability to exit appropriately from the current very expansive monetary policy." Bullard, predicted U.S. growth will accelerate to 3.2% in 2013, a pace he said would allow the Federal Open Market Committee to consider slowing its bond buying after this spring from a rate of $85B a month

Economic Highlights

The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering hope the sluggish labor market recovery may have picked up a step. Initial claims for state jobless aid dropped 27,000 to a seasonally adjusted 341,000, the Labor Department said. The prior week's claims figure was revised to show 2,000 more applications were received than previously reported
The Eurozone contracted the most since the Q1'09, after the unresolved sovereign debt crisis took its toll even on the economic powerhouse Germany. GDP declined at a faster-than-expected pace of 0.6%, much bigger than the previous quarter's 0.1% fall, flash estimates from Eurostat showed. It was worse than a 0.4% drop forecast by economists
The Bank of Japan said that the economy is likely to end further downturn and exports and industrial production will start picking up gradually in the months ahead, according to a monthly report from the central bank. "Japan's economy appears to stop weakening," the central bank said in the report, upgrading its previous assessment that the economy "remains relatively weak." The report noted that exports continued to decrease, but the pace of decrease has moderated