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PMI Reports From Europe & UK To Drive Markets Today

PMI Reports From Europe & UK To Drive Markets Today

Nothing really happened with GBPUSD yesterday as it looked like the movement of the pair has somewhat run out of steam. This is due to the lack of major M&As on the horizon and so lack of money flowing through the pair. Focus now moves back to market fundamentals and especially the Service PMI numbers. We already know that bad weather distorted the construction sector data, and the same could be with today’s report.  it is hoped that we will see some pickup from recent declines, however consensus expectations are for a still-strong 58.0 print after January’s 58.3.

In Europe this morning we have the final reading of February services PMIs as well as of fourth quarter Eurozone GDP. For the composite PMI we saw big revisions in either directions, so the numbers will be more than a foregone conclusion. There is also a growing concern now that ECB President Mario Draghi risks making the same mistake as the Bank of Japan by downplaying the threat of deflation which means he may belatedly have to introduce quantitative easing.

The Aussie dollar was the strongest performer overnight as fourth quarter GDP beat expectations. The stronger-than-expected growth nevertheless remains below trend, and unlikely to shift the RBA’s position.

Decent data out of Canada as well, courtesy of the fourth quarter GDP figures. The Bank of Canada will almost certainly hold its 1 percent overnight rate today but there are still risks facing the Canadian economy.

In the US, we’re starting to look ahead to Friday’s non-farm payroll.

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