Equity Indices

	Closing Price	Change			Closing Price	Change
		On Week	YTD			On Week	YTD
Dow Jones Industrial Average	18,203.37	-0.03%	2.13%	FTSE 100	6,889.13	-0.87%	4.92%
S&P 500	2,107.78	-0.36%	2.37%	Nikkei 225	18,815.16	1.14%	7.82%
Nasdaq Comp	4,979.90	0.24%	5.15%	Hang Seng	24,702.78	-0.19%	4.65%
DJ Euro Stoxx 50	3,549.11	0.06%	12.80%	MSE Index	3,473.828	1.44%	4.29%

Indices in the US ended slightly lower from last week, even though the S&P500 and the Dow Jones hit record highs during the week.  The Nasdaq also closed lower after investors took profits on technology stocks after the index hit the 5,000 level since March 2000.  The Nikkei ended the week higher following China's interest rate cut and a weak yen.

Interest Rates

 Benchmark Bond Yields

	Current 2yr Yield	Yield Change		Current 10yr Yield	Yield Change			Present Interest Rate	Last Variance
		On Week	Since Dec 12		On Week	Since Dec 12
US	0.69	0.09	0.02	2.14	0.14	-0.03	FED	0.00 to 0.25	-0.75  to -1.00	16-Nov-08
Euro	-0.20	0.02	-0.10	0.37	0.01	-0.17	ECB	0.05	-0.10	04-Sep-14
UK	0.67	0.23	0.22	1.86	0.11	0.11	BOE	0.50	-0.50	05-Mar-09
Japan	0.02	-0.01	0.04	0.41	0.07	0.08	BOJ	0.00 to 0.10	-0.10	05-Oct-10
Australia	1.94	0.05	-0.25	2.65	0.12	-0.16	RBA	2.25	-0.25	03-Feb-15
Canada	0.50	0.02	-0.51	1.43	0.10	-0.36	BOC	0.75	-0.25	21-Jan-15
Malta	0.22	-0.03	-0.24	1.48	-0.07	-0.41

The Treasury on Tuesday accepted 4 million in 182-day Treasury bills at an average yield of 0.026%. Outstanding Treasury Bills now amount to Euro 206,440,000 - a decrease of Euro 4.0 million from the previous week.

The People's Bank of China cut both lending and deposit rates by 25 basis points from 1 March.  This has been the second cut in three months and is meant to encourage banks to pass on lower borrowing costs to corporate clients.  The Chinese central bank has lately lowered the level of cash which banks have to set aside as reserves, with further action expected in the coming months in an effort by the bank to tackle the combined effects of slowing economic growth and falling inflation. 

In the US, orders for goods meant to last at least three years rose for the first time in three months. Durable goods orders rose by 2.8% month-on-month in January, lifted by a surge in demand for civilian aircraft, and up from a 3.7% decline in December 2014. The detail of the report revealed orders for non-defence capital goods (excluding aircraft), rose by 0.6% month-on-month, after declining by 0.1% in the previous month.

Economic growth in the US fell more sharply than expected in the fourth quarter of 2014, as GDP expanded by 2.2%, down from an estimate of 2.6%.  A downward revision to business inventories was partly to blame however, growth in consumer spending grew at the fastest rate since the first quarter of 2006.  Manufacturing growth also eased to the slowest pace in over a year.

In Germany, harmonised inflation surprisingly rose in February, registering a 1.0% rise month-on-month, lifting the annual rate much closer to positive territory. A strong increase in food prices and a rebound in the oil price were among the reasons for a broad pick-up in prices.  In the euro zone the initial estimate of annual CPI inflation rose to -0.3% in February from -0.6% in the previous month.  Much of the move was due to higher energy prices although food, alcohol and tobacco inflation surprised on the upside. Meanwhile, unemployment eased for the third consecutive month to 11.2% in January from a downwardly revised 11.3% in December with welcome declines in all four of the largest euro zone countries.

A strong trade performance coupled with the largest rise in consumer spending in almost three years helped Australia's economy grow 2.5% in the fourth quarter of 2014 from a year earlier.   The economy grew 0.5% in the October to December period from the last quarter, when quarterly growth was 0.4%, in line with economists' expectations.  The Reserve Bank of Australia has left interest rates unchanged at a record low of 2.25%, despite calls for a cut from economists as data points to a softer economy.

 

Forex

 

	Exchange Rate	Change
		On Week	YTD
EUR/USD	1.1174	-1.46%	-7.64%
USD/JPY	119.7200	0.63%	-0.05%
GBP/USD	1.5359	-0.61%	-1.40%
EUR/GBP	0.7273	-0.86%	-6.34%
USD/CHF	0.9607	1.08%	-3.38%

The dollar ended the week close to an 11-year high against a basket of currencies.  Investors are waiting for more data from the US and the European Central Bank for fresh clues over policy direction.  Sterling rose after data showed that growth in the construction industry rose to a four-month high during February.

HSBC Bank Malta p.l.c. has based this document on information obtained from sources it believes to be reliable but which it has not independently verified and is for your personal, non-commercial use only. The contents do not constitute a solicitation of the purchase or sale of any investment. Although HSBC makes every reasonable effort to do so, it makes no representations that the information presented is accurate, complete or timely. Expressions of opinion herein are subject to change without notice. Accordingly, HSBC shall not be liable for any decisions made or actions taken in reliance on such information. Past performance is not necessarily a guide to future performance and the value of investments may go down as well as up. Issued by HSBC Bank Malta p.l.c., which is regulated by the