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EU has a deadline or two

EU has a deadline or two

February’s retail sales figures bounced back by 0.4% on the previous month. An unusually warm February contributed to broad-based spending with only food sales dropping. The Bank of England (BoE) held interest rates at 0.75% as expected, and recent data being mixed and Brexit outcome still unknown, this was always going to be the case. It is expected that a hard Brexit will lead to lower rates and a Brexit deal will mean higher rates at some point.

Last night, the EU announced an Article 50 extension until 22nd May if the House of Commons approves Theresa May’s Withdrawal agreement next week. If the deal is rejected the UK will only have until 12th April to indicate a potential way forward, which is also the date beyond which the UK must begin legislating for the EU elections.


The Federal Open Market Committee (FOMC) meeting delivered a somewhat dovish tone on Wednesday, surprising many in the market and sending the US Dollar into a tailspin. Updated forecasts from the central bank point to a lower growth path for the US economy, muted inflation, and an employment slowdown.

Powell still believes the country is in a good place, but the Committee will remain patient and data-dependent given global uncertainties. The famous dot plot is revealing a significant strategy shift from the Fed, with no apparent rate hikes pencilled in for 2019. The Dollar Index is in recovery mode with the Euro retracing from its six-week high.

The market will continue to look into the broader implications of the Fed’s announcement.


Yesterday’s news was dominated by the EU summit, with European leaders seemingly tiring of the UK parliament’s inability to reach an agreement. The leaders, led by France’s Macron, look to be using the threat of a “no deal” to force the UK Parliament into making a decision. They made it clear in no uncertain terms that “no deal” was a realistic possibility.

The Euro rose against the Pound and the Dollar and then fell due to news surrounding Brexit. Most of the data due yesterday came in on consensus, with volatility coming from news breaking from the summit. Data today consists of the European Central Bank’s (ECB) De Guindos’ speech, then markit PMI numbers out of France and Germany. The day is rounded off by the EU’s PMI numbers, a speech by the ECB’s Mersch and then finally the BoE’s Quarterly Bulletin.

Data to Watch:

08:15 EUR ECB’s De Guindos speech
08:30 EUR Markit PMI Composite (Mar)
08:30 EUR Markit Manufacturing PMI (Mar)
08:30 EUR Markit Services PMI (Mar)
09:00 EUR Markit Manufacturing PMI (Mar)
09:00 EUR Markit Services PMI (Mar)
09:00 EUR Markit PMI Composite (Mar)
10:15 EUR ECB’s Mersch speech
12:30 CAD Retail Sales ex Autos (MoM) (Jan)
12:30 CAD Retail Sales (MoM) (Jan)
12:30 CAD Consumer Price Index (MoM) (Feb)
12:30 CAD Consumer Price Index (YoY) (Feb)
12:30 CAD Consumer Price Index – Core (MoM) (Feb)
12:30 CAD BoC Consumer Price Index Core (MoM) (Feb)
12:30 CAD BoC Consumer Price Index Core (YoY) (Feb)
13:45 USD Markit Manufacturing PMI (Mar)
13:45 USD Markit Services PMI (Mar)
13:45 USD Markit PMI Composite (Mar)
14:00 USD Existing Home Sales (MoM) (Feb)
18:00 USD Monthly Budget Statement (Feb)

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