Daily Insight

Following better than expected unemployment data on Tuesday, the Euro was given another boost yesterday as PMI services in the euro-zone maintained February's highest level in 5 years at 58.2, giving further evidence of growth in the service sector. Coupled with that, Retail Sales in Europe rose 0.5% in February, which was in line with expectations but Sterling suffered further when UK Manufacturing unexpectedly fell for the first time in four months with factory production dropping 0.2% from January. As a result, we closed under 1.4300 last night and with the ECB announcement this afternoon, we could see further market movement throughout the course of the day. However, speaking from a strictly technical point of view, this market is now looking relatively 'over-sold' and therefore we may see a bounce upwards in the coming week.

Although the ECB are widely expected to hold interest rates this month, the accompanying press conference should provide the clearest indication yet whether a rise in Euro-zone interest rates will follow next month. In addition, the Bank of England also announce their latest stance on monetary policy this afternoon with forecasters anticipating a 'no change' in UK interest rates for the eighth month running as the central bank awaits more evidence of a pick-up in consumer spending.

With regards the Dollar, we traded down from 1.7600 yesterday on the release of better than expected ISM non manufacturing data, which suggested that the U.S. service sector has expanded more than anticipated in March. This afternoon in the States, we have weekly jobless claims figures released at 13:30 with forecasters predicting a slight rise to 305,000 from 302,000 the previous week.

Data Released 6th April

UK 12:00 Bank of England Rate Announcement

EUR 12:45 ECB Interest Rate Announcement followed by Press Conference

U.S. 13:30 Initial Jobless Claims (w/e 1st April)

written by Adam Solomon