Private Sector PMI Numbers Put the EUR into the Spotlight

Economic data comes back into focus today. The Eurozone’s private sector PMI numbers will indicate whether the slowdown was temporary or worsening…
Bob Mason
Euro Coin Dollar Note

Earlier in the Day:

Economic data released through the Asian session was limited to inflation and manufacturing PMI numbers out of Japan.

For the Japanese Yen,

It was more bad news for the Bank of Japan this morning. Core consumer prices rose by 0.7%, year-on-year. The annual rate of core inflation eased from 0.8% in January. Forecasts were for the rate of inflation to hold steady at 0.8%.

According to figures released by the Ministry of Internal Affairs and Communication,

  • The annual rate of inflation came in at 0.2% in February, falling short of a forecasted 0.3%. The rate of inflation was in line with January.
  • Month-on-month, consumer prices were flat.

The Japanese Yen moved from ¥110.759 to ¥110.762 upon release of the figures that preceded the manufacturing PMI numbers.

The manufacturing PMI held steady at 48.9 in March, according to prelim figures. Forecasts were for the PMI to come in at 49.2. According to the Markit survey,

  • Output fell at the fastest pace in almost 3-years in March.
  • Following the latest trade figures, new orders and new export orders fell at a faster rate than in February.
  • In spite of weaker demand, both output price and input prices rose at a more marked rate.
  • Perhaps of greater significance was improved optimism across the sector. The improved optimism somewhat contradicted the slower pace of purchases that suggests apprehension over what lies ahead.

The Japanese Yen moved from ¥110.846 to ¥110.797 upon release of the figures. At the time of writing, the Japanese Yen was up 0.04% to ¥110.78 against the Dollar.

Elsewhere,

At the time of writing, the Aussie Dollar stood at $0.7106, down by 0.08% for the session. The Kiwi Dollar stood at $0.6890, up by 0.19% for the session.

The Kiwi Dollar continued to find support, ahead of next week’s RBNZ monetary policy decision. Out of the majors, the RBNZ remains the only central bank to take a more hawkish stance going into next week.

The Day Ahead:

For the EUR

It’s a busy day ahead on the data front. Key stats due out later this morning includes prelim March private-sector PMI Numbers out of France, Germany, and the Eurozone.

Following a particularly dovish ECB and a number of weak economic indicators of late, we can expect the numbers to impact the EUR.

The focus will be on Germany’s manufacturing PMI and the Eurozone’s composite.

Outside of the numbers, we can expect Brexit chatter from the EU Summit and sentiment towards trade talks between the U.S and China to also influence.

At the time of writing, the EUR was up 0.02% at $1.1376.

For the Pound

After a choppy Thursday, there are no material stats scheduled for release today.

The focus will remain on Brexit chatter through the day. The British government will be in action following the decision in Brussels on Thursday. While the agreement to extend was positive for the Pound, it’s now down to the deal and whether Parliament will vote for or against.

At the time of writing, the Pound was up by 0.20% to $1.3133.

Across the Pond

Economic data due out of the U.S includes prelim March private-sector PMI numbers and February existing home sales.

Following the FED’s dovish outlook on policy through the remainder of the year, service sector PMI numbers will be the key driver.

Outside of the numbers, expect updates on trade talks between the U.S and China to also have an impact on the Dollar. Positive news will pin back the U.S Dollar.

At the time of writing, the Dollar Spot Index was down by 0.19% to 96.315.

For the Loonie

It’s a busy day ahead for the Loonie. February inflation and January retail sales figures are due out this afternoon.

We can expect both sets of figures to drive the Loonie. Forecasts are skewed in favor of the Loonie.

Upside could be capped should risk sentiment deteriorate through the day, however.

The Loonie was down 0.01% at C$1.3366, against the U.S Dollar, at the time of writing.

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