There were no data releases from Eurozone yesterday. With markets closed this past Friday for the Easter holiday and many markets remaining closed for Easter Monday volume and volatility has been extremely light. Last week the shift in the attitude of the Federal Reserve speakers continues to dominate the currency markets. The latest geopolitical and economic indicators suggest EUR/USD at $1.00 is coming. Growing rumors of the Fed preparing two more rate hikes in 2016 have all but made parity a certainty. It is unlikely that European growth or inflation will reach a high enough level to match the United States, thereby prompting a shift in the current quantitative easing trend favored by the European Central Bank. Euro to dollar exchange rate parity is a realistic expectation. Indeed, while the ECB will stimulate the flow of money, the U.S. Federal Reserve could increase rates again.
In the US session Existing Home Sales figures were published. The Pending Home Sales Index rose 3.5% to 109.1 in February from a downwardly revised 105.4 in January and is now 0.7% above February 2015 (108.3). Analysts were anticipating 1.2% increase. Although the index has now increased year-over-year for 18 consecutive months, last month's annual gain was the smallest. Lawrence Yun, NAR chief economist, says pending sales made promising strides in February, rising to the highest index reading since last July (109.8).
From Eurozone, on Tuesday, M3 Money Supply data is scheduled for a release. No change from 5.0% incline is expected. In the US session Final Pending Home Sales figures will be published. Analysts forecast 1.2% increase.
Figures to watch:
M3 Money Supply (Tuesday 10:00)
CB Consumer Confidence (Tuesday 15:00)
