Europe’s main inflation and employment data, PMI’s from various countries as well as US and Eurozone’s Consumer Confidence indicator are in focus.
Next week’s market movers
- • Germany’s, France’s and Eurozone’s inflation data are expected to draw some focus.
- • Attention will be given also to UK and US Manufacturing PMI.
- • Some market focus will also be shifted towards Germany’s, Eurozone’s and Japan’s Unemployment rates.
On Monday, no major events are expected.
EUR could weaken as the drop is significant and is the first time the indicator has dropped since July 2017. Please be advised that the indicator had also dropped in February 2017 and 2016, hence the market may be expecting it to rebounce the following month as it did in previous years.
Later on, Germany’s preliminary HICP rate for February is due out. The rate is forecasted to decelerate to +1.3% year on year (YoY) compared to the previous reading of +1.4% YoY.
Should the actual prints meet the forecast, EUR could weaken especially after ECB’s meeting minutes release, last Thursday and as it would strengthen the argument for a lower Eurozone inflation rate on Wednesday.
In the American session, the US consumer confidence for February is to be released. The indicator is forecasted to slightly increase to 126.0 from the previous reading of 125.4. USD could be supported as, despite the small increase, there is still a positive outcome which could support a positive sentiment towards the greenback.
On Wednesday, in the Asian day, we get China’s NBS Manufacturing PMI for February. The indicator is forecasted to tick down to 51.2 compared to the previous reading of 51.3.
Such a development could weaken AUD and NZD as their respective economies have high exposure in China. However as the difference is relatively small, the market reaction can be somewhat muted.
During the European morning, France’s preliminary CPI (EU normalised) rate for February is to be released. The rate is forecasted to remain unchanged at +1.5% YoY.
If the forecasts are realised and the rate is seen in conjunction with the previous day’s German HICP, markets expectation for a lower Eurozone Inflation rate could strengthen and weaken the EUR.
Later on, Germany’s Unemployment rate for February is to be released. The rate is forecasted to remain unchanged at 5.4%. However, the Unemployment Change SA tells a slightly better story as the indicator is forecasted to rise to -18k compared to the previous reading of -25K.
Should the actual results meet the forecast, EUR could be somewhat supported due to the Unemployment Change. However, if the big picture is to be seen, EUR could weaken as the data could be interpreted as stagnant for Germany.
Last but not least, in the European day, Eurozone’s preliminary CPI rate for February is to be released. The rate is forecasted to decelerate to +1.2% YoY compared to the previous reading of +1.3% YoY.
Should the actual results meet the forecasts, EUR could weaken as a weaker CPI rate could imply a further delay in the normalisation of the ECB monetary policy both for the interest rate as well as the Quantitative Easing program.
On Thursday, during the European morning, France’s, Germany’s and Eurozone’s final Manufacturing (Mfg) PMI’s for February are to be released. All the prementioned Mfg PMIs are forecasted to remain unchanged at 56.1, 60.3 and 58.5 respectively.
Should the forecasts be realised, the indicators could be sending mixed signals as their preliminary drop will be confirmed however they still remain at strong levels.
Also during the European morning, we get the UK Mfg PMI for February. The indicator is forecasted to tick down to 55.2 compared to the previous reading of 55.3.
Should the actual prints meet the forecasts, GBP could weaken somewhat, however, the reaction may be somewhat muted as the difference is small and the market may prefer to focus more on the Services PMI on Monday.
Later during the US session, we get the ISM Mfg PMI for February. The indicator is forecasted to drop to 58.6 compared to the previous reading of 59.1.
Should the actual results meet the forecast, USD could weaken somewhat.
On Friday, during the Asian morning, Japan’s Unemployment rate for January is due out. The rate is forecasted to remain unchanged at 2.7%.
JPY could strengthen as the rate is consistently low and remains at those levels, indicative of the tight labour market.
Last but not least, during the US session, we get Canada’s GDP growth rate for December. The indicator’s previous reading was +0.4% month on month (MoM).
Any reading indicative of further growth could support the CAD.
All trading involves risk. It is possible to lose all your capital
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.