EUR/USD Daily Forecast

Friday, Apr 01 2016

Friday brought Spanish and Italian Manufacturing PMI data. Business conditions in the Spanish manufacturing sector continued to improve at the end of the first quarter of the year, although there were signs of a slowdown in growth during March. Rates of expansion in output and new orders both eased, but employment continued to rise solidly. A further sharp reduction in input costs was recorded, and output prices were decreased accordingly. The seasonally adjusted Markit Spain Purchasing Managers’ Index posted 53.4 in March, down from 54.1 in February but still signalling a solid improvement in the health of the sector.

Italy's manufacturing sector regained some momentum in March, with output, new orders and exports all increasing at faster rates. Employment at factories rose as a result, although the pace of job creation eased slightly amid falling backlogs of work. Elsewhere, producer prices dropped to the greatest extent for over a year and cost pressures remained on the downside. After having fallen to a 12-month low of 52.2 in February, the headline Markit/ADACI Italy Manufacturing Purchasing Managers’ Index recovered to 53.5 in March, its highest reading in 2016 so far.

In the US session NFP, Manufacturing PMI and Revised Consumer Sentiment figures were released. Total nonfarm payroll employment rose by 215,000 in March.Smaller increase by 206,000 was predicted. Employment gains occurred in retail trade, construction, and health care, while job losses occurred in manufacturing and mining. Unemployment rate rose to 5.0%, while it was expected that it will remain unchanged.

In March, average hourly earnings for all employees on private nonfarm payrolls increased by 7 cents to $25.43, following a 2-cent decline in February, which is 0.3% increase. This was above forecasts on incline by 0.2%. Over the year, average hourly earnings have risen by 2.3 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.37.

Consumer confidence in the U.S. dipped slightly in March as concerns persisted that the world’s largest economy will cool. The University of Michigan final sentiment index for last month eased to 91 from 91.7 in February. The median projection in a Bloomberg survey of economists called for a reading of 90.5. The gauge was up from a preliminary reading of 90 as Americans grew more upbeat about their own finances, offsetting less favorable views in economic growth.

Separate report, on Manufacturing PMI showed that the March PMI registered 51.8 percent, an increase of 2.3 percentage points from the February reading of 49.5 percent. The New Orders Index registered 58.3 percent, an increase of 6.8 percentage points from the February reading of 51.5 percent. The Production Index registered 55.3 percent, 2.5 percentage points higher than the February reading of 52.8 percent. The Employment Index registered 48.1 percent, 0.4 percentage point below the February reading of 48.5 percent.

From Eurozone, on Monday, Spanish Unemployment Change and Eurozone Unemployment Rate figures are scheduled for a release. Analysts are expecting that number of unemployed in Spainsh will increase by 21,300, while Eurozone unemployment Rate should remain unchanged at 10.3%. There will be no data releases in the US part of the session.

Figures to watch:

Spanish Unemployment Change (Monday 9:00)

Unemployment Rate (Monday 11:00)

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