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Euro zone factories suffered in March, but no Cyprus impact as yet

Euro zone factories suffered in March, but no Cyprus impact as yet

Markit’s Euro zone Manufacturing PMI fell in March –slightly better than preliminary estimate, still the escalation of the crisis in Cyprus in the final week of March had little bearing on euro zone manufacturing activity, but that could change this month. In some respects it is supportive to see that the events in Cyprus did not cause an immediate impact on business activity, but the concern is that the latest development in the region’s crisis will have hit harder in April.

Meanwhile, the U.K. economy will avoid another recession and exports will help push a diffident recovery this year, according to the British Chamber of Commerce. U.K. financial firms may add 4,000 jobs. Banks and other firms probably hired 2,000 people in the first three months of 2013 and may add another 2,000 more in the second quarter of this year.

On the FX Markets, similarly to EUR/USD, the pair settled higher on Monday on the back of broad based USD weakness which stemmed from lower than expected US ISM Manufacturing report. There was little in terms of fresh macroeconomic news flow and apart from digesting the news flow relating to Cyprus and Italy, market participants will also await the outcome of the latest MPC meeting. The benchmark rate and the Asset Purchase Facility (APF) expected to be kept unchanged.

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