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Good morning,

Markets are called to open flat this morning. This is what's happening today:

  • China’s industrial output had the weakest start to a year since 2009 and lending and retail sales growth slowed, toughening challenges for a new leadership that wants to narrow the gap between rich and poor;
  • German exports rose more than economists forecast in January, adding to signs that Europe’s largest economy is gathering momentum after a contraction in the fourth quarter;
  • Final Italian GDP will confirm initial figures that showed a contraction, according to economists;
  • Italy downgraded to ‘BBB+’ by Fitch; outlook negative;

The international ratings agency Fitch has downgraded Italy's sovereign debt rating by one notch to triple-B-plus from A-minus. Fitch pointed to the inconclusive results of the Italian parliamentary elections last month, which the agency says make it unlikely a stable new government can be formed in the next few weeks.

International investors who propelled the biggest rally for Japanese shares since 1987 would have earned almost as much in the Standard & Poor’s 500 Index once the yen’s 16% tumble is taken into account. The Topix Index, the country’s broadest equity measure, has climbed 41% in the 74 days since the rally began in November. After adjusting for the yen’s depreciation against the dollar, the return shrinks to 18%, or three percentage points more than the S&P 500. This year’s 18% advance in the Nikkei 225 Stock Average falls to 6.8% in dollar terms, less than the 8.8% increase by the U.S. benchmark index.

The sudden slowdown in U.S. inflation has left Treasuries at the cheapest levels in almost two years, aiding the Federal Reserve’s efforts to tamp down long-term borrowing costs while the economy improves. Yields on 10-year notes, the benchmark measure for everything from home loans to corporate bonds, reached an 11-month high of 2.08 percent on March 8. The securities pay interest 0.88 percentage point higher than the personal consumption expenditures index deflator, the Fed’s favored inflation gauge, the widest gap since May 2011.

An interesting stock to follow. is Inditex. Deutsche Bank are bullish on the stock with a price target of E115. The following are the analysts comment, 'After a period of impressive outperformance, Inditex shares have modestly underperformed the IBEX 35, DJ Stoxx 600 and its peer H&M in the past 3 months. Inditex’s growth prospects remain very attractive and in 2013 we think these drivers – Multi-brand growth, Asia, and Online – will enable it to cycle tough comparatives with good growth. Our Clothing outlook ‘5 questions for 2013’ supports a view that Inditex is better positioned this year than its peers, particularly as it is less exposed to Asian sourcing. Buy, TP E115.'

For more information on Inditex or other stocks we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli