EUR/GBP Fundamental Forecast – March 30, 2016

The EUR/GBP is down 7 points as the pound continues its strange rally. The pair is trading at 0.7848. Lending to euro zone companies and households grew at its fastest pace since late 2011 in February, suggesting the bloc was continuing with modest recovery, despite falling inflation and slowing global growth, ECB data showed on Tuesday.

The ECB bought hundreds of billions of euros worth of assets in the past year and had announced it will up the monthly pace of purchases by a third, hoping to kick-start lending to drive up growth and inflation.

British banks will find out on Tuesday if the Bank of England wants them to start building up extra capital buffers to guard against looser lending standards and prepare for this year’s test of their crisis resilience.

Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group are some of the lenders subject to the BoE’s ‘stress tests’, which in previous years have assessed if they could cope with a house price crash or an emerging market slump.

These banks and other lenders may also have to set aside more funds if the central bank decides the time is right to raise the cyclical element of its capital framework, which rises and falls as the risk of imprudent lending changes over the course of a business cycle.

Members of the central bank’s Financial Policy Committee, who met this week, were split in December on whether it was time to raise the new counter-cyclical capital buffer banks must hold to 1 percent – its neutral level – from zero.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

Wednesday, March 30, 2016

Government Bond Auctions

Date Time and Country

Mar 29 19:00 US Holds 5-year notes auction

Mar 30 11:03 Sweden Holds bond auction

Mar 30 11:10 Italy Holds bond auction

Mar 30 11:30 Germany Eur 4bn Apr 2021 Bobl

Mar 30 19:00 US Holds 7-year notes auction

Mar 31 17:20 Sweden Details of I/L auction on Apr 07

Apr 01 N/A Italy Details of new BTP€i on Apr 04