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EUR/USD Weekly Forecast - 28 March – 01 April

Friday, Mar 25 2016

Events that marked the week:

From Eurozone, on Tuesday, French and German Services and Manufacturing PMI data was released, as well as German Business Climate and ZEW Economic Sentiment figures. The French private sector economy ended the first quarter on a more positive note, reversing the dip in output seen during February. Overall, PMI data suggest a further modest rise in GDP during Q1, doing little to suggest any break from the sluggish growth pattern seen during recent times. While no change was expected. Flash France Services Activity Index climbed to 51.2 from 49.2 in February what is a 5-month high. On the other hand Flash France Manufacturing PMI dropped to 49.6 from 50.2 in February, what is a 7-month low.

Today’s flash PMI results signal ongoing growth of private sector output in the euro area’s largest member state, despite the pace of expansion failing to accelerate from February’s five-month low. Furthermore, there are signs that subdued demand is now also affecting the labour market, as the rate of job creation eased to a near one-year low. Flash Germany Manufacturing PMI stood at 50.4 from 50.5 in February, a 16-month low, while Flash Germany Services Activity Index rose to 55.5 from 55.3 in February, a 3-month high.

 

After weakening for three consecutive months, sentiment among German businesses brightened slightly in March. The Ifo Business Climate Index for German industry and trade rose to 106.7 points in March from 105.7 points in February. Analysts were forecasting increase to 106.2. Assessments of the current business situation improved, reaching their highest level in six months. After last month’s sharp decline, expectations also recovered somewhat. German businesses are less sceptical than in February.

 

The ZEW Indicator of Economic Sentiment for Germany has slightly increased in March 2016. The index has improved by 3.3 points compared to the previous month, now standing at 4.3 points, but missed expectations on incline to 6.3 points."The uncertainty associated with the future economic development of important emerging economies, with the development of the oil price and with the external value of the euro continues to call for caution. Apparently, the renewed move of the ECB to considerably ease its monetary policy has not had a substantial effect on economic sentiment", says Professor Sascha Steffen, head of the ZEW Research Department "International Finance and Financial Management".

 

This week markets will be looking at:

 

M3 Money Supply (Tuesday 10:00)         

German Prelim CPI (Wednesday)

German Retail Sales (Thursday 08:00)

Spanish Flash CPI (Thursday 09:00)

CPI Flash Estimate (Thursday 11:00)

Spanish Manufacturing PMI (Friday 09:15)

Italian Manufacturing PMI (Friday 09:45)

More in this category: « GBP/USD Weekly Forecast - 28 March – 01 April AUD/USD Weekly Forecast - 04 April – 08 April »

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