if actual > forecast = good for currency (for EUR in our case)
The French private sector returned to growth in March for the first
time since last October, flash survey data from Markit Economics showed
The flash composite output index rose to 51.6 from 47.9
in February. A score above 50 indicates expansion and the latest
reading signals the fastest growth in 31 months.
broad-based across the service and manufacturing sectors. The services
activity index climbed to 51.4, a 26-month high, from 47.2 in February.
The reading was expected to rise to 47.8.
Similarly, the manufacturing PMI improved more than expected to 51.9, a
33-month high, from 49.7 in the prior month. The score was forecast to
rise to 49.8.
Expansion In German Private Sector Slows In March
Germany's private sector growth slowed in March from a 33-month high
but the pace of expansion remained marked, preliminary survey data from
Markit Economics showed Monday.
The flash composite output index
dropped to 55.0 from February's 33-month high of 56.4. Nonetheless, a
reading above 50 indicates expansion.
The easing in the rate of
activity growth was broad-based, with both manufacturers and service
providers indicating weaker expansions than seen in February.
flash services activity index slipped more-than-expected to 54.0 from
55.9 in February. The score was forecast to fall to 55.5.
Likewise, the flash manufacturing PMI came in at 53.8, down from 54.8 in February and below the expected reading of 54.5.
the rate of expansion in activity eased to a three-month low, growth in
the three months to March was the joint-strongest since mid-2011,"
Oliver Kolodseike, economist at Markit said.
Fundamental indicators explained (based on dailyfx article)
Inflation figures out of the U.K. remain key for
price action in GBP crosses moving forward as the Bank of England
continues to remain quiet as prices rise towards the 2.5% YoY level
floated by Carney as possible ‘threshold’ for any rate increases. The
savvy leader of the BoE (and former head of the Bank of Canada) has
likely remained silent as to not further fuel speculations of rate
increases sooner rather than later. Any further official speculation
would add even more fundamental fuel to the GBP’s rise. Higher inflation
figures reported on Tuesday would likely support the Sterling while
those that meet or beat expectations may leave GBP crosses relatively
unchanged as we have seen before.
Japanese data and even developments out of the Bank
of Japan have failed to move Yen crosses over the last few weeks as some
of the equity/yen correlations have broken down. Nevertheless,
inflation data out of Japan gives key insight into whether the BoJ is on
target with its goal of achieving 2% CPI by expanding its monetary base
dramatically. If inflation expectations miss expectations, we will have
to see comments from the BoJ eventually, even as the central bank
remains relatively silent as the fiscal house attempts to get the sales
tax and corporate tax changes in order. A failure to do so could lead to
instability in Japanese confidence, but of course price action as of
late continues to remain market sentiment in equity and bond markets.
These preliminary figures for German inflation data
will be closely watched by market participants, especially in the
context of EUR/USD
just below 1.40 and as Draghi of the European Central Bank remains
almost overconfident in his assessments of EU prospects. If we see a
miss here, it will add to fundamental pressure on the Euro and pressure
as well on the ECB to eventually take some sort of action. On the other
hand, if we do see developments out of Russia that include any hint of natural gas supply disruptions, disinflation worries would likely be something of the past
as higher prices would help boost CPI levels. Nevertheless, this is the
sort of inflation not welcomed by consumers or the ECB. Although equity
markets continue to brush off worries of geopolitical tensions, those
trading Euro and Yen crosses should not be complacent, especially as
forex markets have proved to respond most logically to macro
Ultimately this growth (or lack of it) causes inflationary pressures in
the market place. With central banks looking to potentially change
monetary policy due to these results GDP announcements can become
Next, we will look at the Consumer Price Index (CPI). CPI is another
economic indicator that is released on a monthly basis by most major
economies. It is designed to give a timely glimpse into current
inflation levels in an economy. Inflation tracked through CPI looks
specifically at purchasing power and the rise of prices of goods and
services. If prices are rising drastically this can be signs of growth
as well as rising inflation.
In most scenarios, if CPI is released lower than expected, normally this
would influence Reserve Banksto consider stimulating the economy by
opting for lower interest rates or commit to new open market operations
to increase the money supply. Conversely a higher CPI reading suggests
an inflating economy. This would give cause for increasing current
interest rates and thus affect demand for a currency.
Lastly fundamental traders should monitor employment figures to get a
bearing on the strength or weakness of an underlying economy. A booming
economy will offer many employment opportunities and drive down
unemployment figures. As business contracts, the opposite is true. As
unemployment rises, it can have a devastating effect on an underlying
While there are a variety of employment statistics that can be tracked
one of the most watched is the Non Farm Payroll (NFP) figure released in
the United States. This event shows new jobs added to the workforce
outside of the agricultural sector and shows the strength of the US
economy. As this number is released fundamental traders will watch for
opportunities to buy or sell currencies coupled with the dollar.
A further slowdown in U.K. inflation may generate a further decline in
the GBP/USD as it limits the Bank of England’s (BoE) scope to normalize
monetary policy sooner rather than later.
Why Is This Event Important:
Indeed, the upcoming shuffle in the Monetary Policy Committee (MPC) may
spark a material shift in the policy outlook as the central bank
continues to assess the underlying slack in the real economy, but it
seems as though Governor Mark Carney will do little to halt the
appreciation in the British Pound as it helps to balance the risks
surrounding the region.
How To Trade This Event Risk
Bearish GBP Trade: U.K. CPI Narrows to 1.7% or Lower
U.K. Consumer Prices grew an annualized 1.9% in January to mark the
slowest pace of growth since November 2009, with the core rate of
inflation narrowing to 1.6% from 1.7% the month prior. The initial
reaction to the weaker-than-expected print was short-lived as the
GBP/USD climbed back above the 1.6700 handle, but the sterling struggled
to hold its ground during the North American trade as the pair closed
Google Partners with Luxottica to Bring Glass Technology to Ray-Ban and Oakley
Two major proprietary brands of Luxottica, Ray-Ban and Oakley will be a
part of the collaboration with Glass; however details about these new
products will be disclosed at a later stage. The first collection
generated by this partnership is said to combine high-end technology
with avant-garde design offering the best in style, quality and
if actual > forecast = good for currency (for GBP in our case)
German Business Sentiment Falls More Than Forecast
Germany's business confidence declined more than expected in March, reports said citing a monthly survey from Ifo institute on Tuesday.
The business sentiment index dropped to 110.7 from 111.3 in February, when the score was expected to fall to 110.9.
assessment of current conditions improved to 115.2 from 114.4 in the
prior month. Economists had forecast the index to rise marginally to
The expectations index fell to 106.4 in March from 108.3 a month ago. The score was seen at 107.7.
Mixed Markets Look To Draghi, US Data For Clarity (based on forexminute article)
European markets look strong on Tuesday despite mixed economic data, and
US index futures are up pre-trade ahead of a raft of key fundamental
Starting in Europe, the FTSE is currently trading at 6,596.13, a 1.16%
(75.75-point) premium to the day's open. The gain sees the index break
through Thursday/Friday highs, and despite a Monday afternoon selloff
that broke Friday lows. Leading the charge is home improvement retailer
Kingfisher plc (KGF.L), up 7.06% at 435.20 on a positive earnings
The gains in the UK come as the ONS reports better than expected retail
price index data, with the core headline figure coming in at 0.7% versus
a forecast 0.5%. Consumer price index (CPI) came in as expected, with
the YoY figure at 1.7% and the MoM figure at 0.5%. Producer price index
(PPI) data missed expectations, the headline input MoM figure reported
at -0.4% versus a forecasted 0.3%.
In Germany, the DAX 30 is up 1.66% at 9,340.36. Heading into European
lunch, the day's biggest gainer is kidney dialysis company Fresenius
Medical Care AG & Co. KGAA (FME.DE), currently up 3.51% at 50.26. As
with its UK counterpart, the DAX's gains follow mixed data. German
business expectations missed expectations, reported at 106.4 versus a
forecast of 107.6; current assessment beat expectations of 114.6,
reported at 115.2; and IFO business climate index disappointed, reported
at 110.7 versus a forecast of 111.0.
In the US, S&P 500 futures are up 0.33% at 1,855.65, while NQ100
futures are up 0.31% at 3,622.30, approximately one hour before the US
The gains likely come in anticipation of better than expected
fundamental US data releases, with the day's headliners being CB
consumer confidence, forecast at 78.6, and new home sales, forecast at
445K, a 4.9% decline on previous data.
Traders and investors will also look to ECB President Mario Draghi for
insight into Eurozone monetary policy, with his bimonthly speech
scheduled for 16:00 GMT on Tuesday.
2013-03-25 14:00 GMT (or 15:00 MQ MT5 time) | [USD - Consumer Confidence]
if actual > forecast = good for currency (for USD in our case)
U.S. Consumer Confidence Improves Much More Than Expected In March
Consumer confidence in the U.S. has improved by much more than
expected in the month of March, according to a report released by the
Conference Board on Tuesday.
The Conference Board said its
consumer confidence index jumped to 82.3 in March from a revised 78.3 in
February. Economists had been expecting the index to edge up to 78.4
from the 78.1 originally reported for the previous month.
bigger than expected increase by the consumer confidence index reflected
a rebound in expectations for the short-term outlook. The report showed
that the expectations index surged up to 83.5 in March after tumbling
to 76.5 in February.