EUR/USD Fundamental Forecast – March 25, 2016

The EUR/USD fell 12 points after the disappointing release of German consumer confidence and a stronger US dollar. The pair is trading at 1.1169. In February, eurozone headline inflation fell back into negative territory, for the first time in five months. The annual rate of inflation dropped from 0.3% Y/Y to ‐0.2% Y/Y, its lowest level in one year. The drop in headline inflation was however no real surprise following the recent decline in the oil price and negative base effects. More surprising was the significant slowdown in core inflation. According to the first estimate, core inflation slowed from 1.0% Y/Y to 0.7% Y/Y, but the final reading showed an upward revision to 0.8% Y/Y. Still, EMU core inflation remains close to its record low.

A slowdown in private-sector consumption, one of the leading drivers of growth and inflation, may push the Federal Open Market Committee (FOMC) to further delay the normalization cycle as the weakening outlook for the global economy derails hopes for a stronger recovery.

U.S. Durable Goods Orders bounced back in January, with demand for large-ticket items increasing 4.9% after contracting a revised 4.6% the month prior. At the same time, Non-Defense Capital Goods Orders excluding Aircrafts, a proxy for future business investment, advanced 3.9% during the same period amid forecasts for a 1.0% print, and the pickup in private-sector activity may encourage the Federal Reserve to further normalize monetary policy in 2016 especially as the U.S. economy approaches the natural-rate of unemployment.

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.

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Friday, March 25, 2016

Government Bond Auctions

Date Time and Country

Mar 28 19:00 US Holds 2-year notes auction

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