Flurry of Data from Eurozone and MPC
Expect lots of movement in the markets today as we see a flurry of data from the Eurozone and Monetary Policy Committee (MPC) minutes from this month’s meeting, in addition to a number of other news items concerning the Yuan, Australian Dollar and British Pound.
We have already seen the French Manufacturing PMI miss forecasts, and are awaiting further PMI readings. German figures have been more positive but still not overly impressive. These will be closely watched by the markets as the ECB uses these numbers to monitor inflation and growth and decide if the economy needs further stimulus.
The Australian Dollar has weakened majorly overnight as inflation figures released for Q1 remained within the 2-3% RBA target, meaning a rate hike by the RBA at some point in 2014 is unlikely, thus removing pressure from them.
The Chinese Yuan is at its worst levels in 16 months as a HSBC report showed the country’s factory output is still contracting. With the economy still seemingly slowing down, it’s no surprise that the Yuan is the worst performing Asian Currency in 2014.
In the US, sales of previously owned homes fell in March for a third consecutive month, which was in no small part due to the inclement weather in January and February, and the reality of property values rising faster than wages.
We also saw the British Pound Sterling get near 4 year highs against the Dollar amid speculation that the Bank of England minutes will show we are getting closer to raising borrowing costs. Just to repeat the positivity surrounding the UK at the moment, the GB economy is expected to continue at a faster pace than the Eurozone, the unemployment rate is down to its lowest level in 4 years and the Pound has strengthened by 5.5% in the past 6 months.
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