EUR/USD Daily Forecast

Tuesday, Mar 01 2016

From Eurozone, yesterday, Spanish and Italian Manufacturing PMI, as well as Eurozone Unemployment Rate and German Unemployment Change data was published. Despite a slight slowdown in growth in February, the Spanish manufacturing sector continued to record a marked improvement in business conditions in the latest survey period. Moreover, the rate of job creation quickened to a seven-month high. Lower prices for oil and steel were the main factors behind an accelerated pace of decline in input costs, in turn leading firms to lower their output prices. The seasonally adjusted Markit Spain Purchasing Managers’ Index posted 54.1 in February, slightly below January’s reading of 55.4 but still signalling a solid improvement in the health of the sector.

Manufacturing output in Italy rose at the slowest rate for over a year in February, reflecting a further easing in the pace of expansion in new orders. Employment continued to increase, but buying levels stagnated to end a 12-month sequence of growth. Elsewhere, there was a further sharp decrease in manufacturers’ purchasing costs amid lower global commodity prices. The headline Markit Italy Manufacturing Purchasing Managers’ Index registered a 12-month low of 52.2 in February, slipping from January’s 53.2 and falling further below December’s 57-month high.

The euro area (EA19) seasonally-adjusted unemployment rate was 10.3% in January 2016, down from 10.4% in December 2015, and from 11.3% in January 2015. No change was forecasted. This is the lowest rate recorded in the euro area since August 2011. The EU28 unemployment rate was 8.9% in January 2016, down from 9.0% in December 2015, and from 9.8% in January 2015. This is the lowest rate recorded in the EU28 since May 2009.

Earlier today, German joblessness fell for a fifth month in February in a sign that economic momentum will continue to be underpinned by household spending. The number of people out of work declined by a seasonally adjusted 10,000 to 2.72 million, data from the Federal Labor Agency in Nuremberg showed on Tuesday. That matched the median estimate of economists. The jobless rate was unchanged at 6.2%, the lowest level since German reunification.

The February PMI registered 49.5 percent, an increase of 1.3 percentage points from the January reading of 48.2 percent. Analysts were anticipating smaller incline to 48.5. Comments from the panel indicate a more positive view of demand than in January, as 12 of our 18 industries report an increase in new orders, while four industries report a decrease in new orders.

From Eurozone, tomorrow, Spanish Unemployment Change data will be published. Increase by 200 is forecasted. In the US session ADP job figures will be released. Analysts predict incline by 185,000.

Figures to watch:

Spanish Unemployment Change (Wednesday 9:00)

ADP Non-Farm Employment Change (Wednesday 14:15)

More in this category: « GBP/USD Daily Forecast – 02 March AUD/USD Daily Forecast – 03 March »