Daily Insight

We have seen some significant market movement in the past 24hrs and Euro sellers should pay particular attention to this trend as the Euro strengthened against Sterling to close under the 1.4400 level last night. We can expect to see further gains this morning with Consumer Confidence in the Euro-zone forecasted to show a sharp rise to 102.8 in the month of March, reaching a 5 year high as growth in the economy begins to gain momentum. However, there has been some poor data coming out of Germany with unemployment data showing a rise in March and Retail Sales is expected to decline for the first time in 3 months, slipping 0.6% in February due primarily to higher energy prices and rising unemployment.

There was also some significant economic data released in the States yesterday as U.S. Initial Jobless Claims unexpectedly fell by 10,000 last week with claims for unemployment benefits dropping to 302,000 from 312,250 as week earlier. The Dollar was also hampered when GDP in the fourth quarter showed that the U.S. economy grew at an annual rate of 1.7%, the slowest pace in almost five years.

Data Released 31st March

UK 09:00 Consumer Confidence

EUR 10:00 EC Sentiment Index - Industrial Confidence

Consumer Confidence

U.S 15:45 Personal Income/Expenditure

U.S 16:00 Michigan Sentiment (Mar)

U.S 16:00 Chicago PMI (Mar)

U.S 16:00 Factory Goods Orders

written by Adam Solomon

There was some significant data released in the UK yesterday with economic growth accelerating to the fastest pace in a year, due in part to a pickup in services and government spending. In addition, UK Mortgage Approvals fell to a 3 month low in February with lenders approving 115,000 home loans compared with 121,000 in January, the first decline in 15 months and that is coupled with a rise in UK house prices in the month of March. Sterling also suffered after Britain's current account deficit remained unexpectedly large after forecasters predicted a sharp narrowing to £6.9 Billion in the fourth quarter of last year, while the actual figure stands at £10.95 Billion, raising concerns that the economy is still unbalanced and may not accelerate as fast as previously predicted.

As a result, Sterling fell dramatically against the Euro, which is being boosted following positive Business Confidence data in Germany, fuelling speculation that the ECB will continue to raise interest rates in the coming months. There is also some significant data in Germany this morning with unemployment figures expected to be unchanged in March.

The dollar is still reaping the rewards of a 15th consecutive hike in interest rates and with some significant data released this afternoon in the States, we could see some further market movement today. GDP is expected to show that the U.S economy expanded to an annual rate of 1.7% in the fourth quarter.

Data Released 30th March

U.S 14:30 GDP (Q4 final)

U.S 14:30 Initial Jobless Claims (w/e 25th March)

written by Adam Solomon

In the past 24hrs, the Euro has gained against Sterling after Business Confidence in Germany unexpectedly rose to it's highest level in almost 15 years in March, giving investors encouragement that the ECB will move interest rates again over the coming months. Coupled with the ifo Index, Consumer Confidence in Germany rose to it's highest level in nearly 4 years this morning, which gives further indication that household spending in Europe's largest economy will continue to support economic growth.

With regards the Dollar, U.S. Consumer Confidence, which was expected to show only a mild rise in the month of March, also jumped to it's highest level in 4 years, due primarily to an increase in household income. However, the focus was on the FOMC announcement at 20:15 last night where the Federal Reserve announced a quarter-point rise in interest rates to take them to 4.75%, the highest level since March 2001. The Fed chairman, Ben Bernanke indicated that he will extend borrowing costs this year, prompting investors to debate that further rate hikes are ahead. As a result, the Dollar strengthened significantly against Sterling driving the rate back under 1.7500, which was the high of yesterday.

There is some significant data released this morning in the UK with fourth quarter GDP data expected to be unchanged and Consumer Credit is forecasted to show a slight decline in February.

written by Adam Solomon

Good Morning,

Following a relatively quiet day yesterday, we can expect to see some market movement today with significant data released in both Europe and the States. Since the back-end of the last week, Sterling has been gaining against the Euro, closing last night above 1.4500 and with Business Confidence in Germany expected to show a decline in March, we can expect to see further movement throughout the course of the day.

The Dollar has been boosted ahead of the Federal Reserve meeting this evening with policy makers expected to raise interest rates to 4.75% and we will be paying particular attention to the accompanying statement where we can hope to gain a greater understanding of future policy and whether the Fed will keep raising borrowing costs over the coming months. There is also U.S Consumer Confidence data released at 16:00 today with forecasters anticipating only a slight improvement in March following higher petrol prices and a weakening housing market.

Data Released 28th March

GER 09:00 IFO Index (March)

U.S. 16:00 Consumer Confidence (March)

U.S 20:15 FOMC Rate announcement

written by Adam Solomon

The main theme in the market yesterday was predominantly dollar strength as U.S. Jobless Claims fell 11,000 in the last week, the first decline in four weeks, which suggests that job growth will keep fuelling consumer spending in the States. Also, the dollar was given a major boost when sales of existing homes in the States unexpectedly rose in February for the first time since August and as a result the dollar advanced as resales in February rose 5.2% to an annual rate of $6.91 Million against the predicted $6.5 Million.

There is also some significant data out in the U.S. this afternoon with Durable Goods Orders at 13:30 with forecasters anticipating a slight rise in February of 1%. In addition, we will we watching closely as Sales of New Homes is published at 15:00 in the States and if the data mirrors the unexpected rise in existing homes sales, we can expect the Dollar to make further gains this afternoon.

The Euro was buoyed yesterday with positive economic data coming out of Germany with Import Prices accelerating faster than expected in February, due primarily to rising energy costs. Without any significant data released in the UK or the Euro-zone today, we expect the dollar to take centre stage this afternoon.

Data Released 24th March

U.S. 13:30 Durable Goods Orders (Feb)

U.S. 13:30 New Homes Sales (Feb)

Written by Adam Solomon