- Sterling improves on manufacturing data
- Australian Dollar scuppered by Chinese data
- Raft of US data awaited
As we suspected, UK manufacturing sentiment was stronger than most forecasters expected in March and the Pound reacted in traditional style; strengthening on the news. Today’s UK Construction Purchasing Managers’ Index (PMI) was disappointing news for the industry, with adverse weather conditions taking their toll and the quickest fall in activity in 21 months. The number of cranes in London seems disproportionate to these figures, but I guess that is a tad too simplistic. Tomorrow’s Service Sector PMI for the UK is the most significant of these indices in terms of currency effects, so we await that with interest.
Mixed results for Australia
Overnight we had mixed data from Australia. Building approvals were significantly worse than expected in February, but retail sales rose at twice the forecast rate. On balance, that ought to have strengthened the Aussie Dollar, but a poor service sector sentiment index from China appears to have scuppered that.
Inflation expected to be up for Eurozone
The Euro may well strengthen through the morning after what we believe will be an uptick in inflation for the Eurozone. A rise from 1.1% to 1.4% on the annual consumer inflation rate is expected and there is a good chance that the Eurozone unemployment rate will slip a smidgeon to 8.5%. That is still pretty dire, but a step in the right direction.
Raft of US data expected this afternoon
And the afternoon is awash with a tsunami of US data. Aside from two speeches by Federal Reserve members, we will also see Purchasing Managers Indices in the service sector, durable goods orders, factory orders and a measure of oil inventories. All have the potential to move the US Dollar and, as the forecasts are positive overall, that could well be a positive move for the USD. i.e. $1.40 against the Pound could come under pressure and $1.22 against the Euro, likewise.
Google finds lost city of Atlantis
And it has been found…probably. The lost city of Atlantis has been spotted on the Madeira Abyssal Plane, off the coast of Morocco, using Google Earth. Who knew it would be so easy and how did they get one of those little cars out into the ocean? It’s all very mysterious.
Joke of the day
What happens to a frog's car when it breaks down?
It gets toad away.