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Daily Agenda: ECB Easing Kicks into Gear

Investors focus on U.S. jobs data and ECB easing; Saudi Arabia moves ahead with Aramco IPO; modest PMI pickup for manufacturers in Europe and China.

The week comes to a conclusion with investors focused once again on central bank policy. While employment data in the U.S. will provide more insight into the likely pace of future rate hikes by the Federal Reserve, in Europe today the European Central Bank’s massive easing program began market operations. In particular, the inclusion of corporate bonds in more than $90 billion of financial products to be bought by the ECB is expected to have a massive effect on market confidence.

Saudi Arabia to raise assets for sovereign wealth fund. In a Friday interview with Bloomberg Prince Mohammed bin Salman, the deputy Crown Prince of Saudi Arabia, confirmed that the kingdom plans to hold an initial public offering for the Saudi Arabian Oil Company, also known as Aramco. Proceeds of the flotation will swell the Saudi Public Investment Fund with assets that may exceed $2 trillion, making it the largest government-controlled investment vehicle worldwide. The prince indicated that an offering of as much as 5 percent of the shares in the company could occur in 2017.

Mixed economic indicators from Europe. Levels of the manufacturing purchasing-manager index for March released today by Markit indicated a pickup in activity in Europe with a reading of 5.16 for the headline index covering the common currency region and stronger-than-forecast levels for Germany. Coming a day after weak Eurostat consumer-price data, which confirmed that deflationary pressure remains a hurdle for the region, the manufacturing pickup may be insufficient on its own to indicate that ECB intervention has yet started to achieve the desired impact.

Chinese factory activity jumps. Purchasing-manager index levels released by China’s National Bureau of Statistics on Friday registered significantly stronger-than-forecast numbers, with a positive reading of 50.2. Separately, private measures produced by Markit/Caixin, which is based on surveys of smaller companies, also fared better than expected but remained in negative territory at 49.7. Analysts note that both measures may be distorted by the Lunar New Year holiday in February.

Andersen to head Danske Bank wealth unit. On Friday, Danske Bank announced the elevation of Tonny Thierry Andersen to head the bank’s wealth-management unit overseeing more than $130 billion in assets. The move by Denmark’s largest bank to combine retail investment and retirement divisions into a single wealth management division was announced at the end of 2015.

US job market remains resilient. The March employment report from the Department of Labor included an increase of 215,000 non-farm payroll employees in a signal that macro setbacks for global growth have not deterred U.S. companies from continuing to hire. Although the payroll reading was slightly softer than the prior -upwardly revised, measure it was higher than consensus forecasts. Headline unemployment, which is calculated in a different manner, rose slightly to 5 percent. Critically, earnings rose by 0.3 percent versus February, a potential boon for household consumption.

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