EUR/USD Fundamental Analysis March 6, 2012, Forecast

Analysis and Recommendations:

The EUR/USD climbed a bit today after dropping to 1.3166 over the weekend, trading at 1.3226 after hitting a high just a few days ago of 1.3479. The euro should find a home in the 1.31 range this week. For some reasons investors are once again spooked over the Greece PSI bond swap, which has a deadline of March 8th. In the US today the ISM reported a lackluster month, adding to the weakness of the USD.

 

Monday March 5, 2012 Economic Data Release actual v. forecast

 

AUD

 

 

 

Company Gross Operating Profits (QoQ) 

5%

 

0.3% 

 

4.7% 

 

 

 

CHF

 

 

 

Retail Sales (YoY) 

4.4%

 

2.0% 

 

1.7% 

   

 

GBP

 

 

 

Services PMI 

53.8

 

55.0 

 

56.0 

 

 

 

EUR

 

 

 

Retail Sales (MoM) 

0.3%

 

-0.1% 

 

-0.5% 

   


In Europe

Euro zone final composite PMI falls to final 49.3 in February

Italy services PMI 44.1 in February. Down from 44.8 in January and well below Reuter’s median forecast of 45.2.

Swiss January retail sales up +4.4% y/y.

Spanish services PMI 41.9 in February. Demonstrably lower than 46.1 in January and Reuter’s median forecast of 45.9.Eighth month of contraction, lowest read since November.

Today in the UK

UK services sector saw growth slow in February after the surge in January, the CIPS/Markit index shows. The headline service sector CIPS/Markit index fell to 53.8 in February from an unrevised 56.0 in January, well below analysts’ median forecast for a 55.0 outturn. The detail, however, was more encouraging showing a rise in business expectations and easing inflation pressure.

Business expectations rose to their highest level for a year while output charges declined. Markit said sales were supported by discounting, with margins squeezed as input cost continued to rise.

 

Economic Events: (GMT)

Tuesday will be a very quiet day on the Economic Data Front. With little was due on Monday and virtually nothing on Tuesday. Keep an eye on Australia, where the RBA will be announcing rates.

10:00     EUR       GDP (QoQ)                                         -0.3%                     -0.3%      

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.            

15:00     CAD      Ivey PMI                                             62.1                        64.1

The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction. The index is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

A higher than expected reading should be taken as positive/bullish for the CAD, while a lower than expected reading should be taken as negative/bearish for the CAD.

Sovereign Bond Auction Schedule

Mar 05  10:10  Norway  Bond auction

Mar 06  10:10  Greece  Auctions 6M T-bills

Mar 06  10:15  Austria  Bond auction

Mar 06  10.30  UK  Auctions 0.75% 2034 I/L Gilt

Mar 06  15:30  UK  Details gilt auction on Mar 15

Mar 07  10:10  Sweden  Nominal bond auction

Mar 07  10:30  Germany  Eur 4.0bn Feb 2017 Bobl

Mar 07  10.30  UK  Auctions new Sep 2017 conventional Gilt

Mar 08  16:00  US

Announces auctions of 3Y Notes on Mar 12, 10Y Notes on Mar

13 & 30Y Bonds on Mar 14

Mar 08  16:30  Italy   Details BOT auction on Mar 13

Mar 09  11:00  Belgium  OLO mini bond auction

Mar 09  16:30  Italy   Details BTP/CCTeu on Mar 14