Talking Points:
- British Pound May Decline if Soft PMI Data Undermines BOE Policy Outlook
- Australian Dollar Rallies After RBA Keeps Interest Rates Unchanged at 2.25%
- See Economic Data Flow Directly on Your Charts with the DailyFX News App
UK Services PMI data headlines the economic calendar in European trading hours. Expectations suggest the pace of activity growth in the non-manufacturing sector will modestly accelerate in March. UK economic news-flow has tended to disappoint relative to consensus forecast recently, warning that analysts may be overestimating the economy’s vigor and opening the door for a downside surprise. Such an outcome may push out bets on a Bank of England interest rate hike further into the future, weighing on the British Pound. As it stands, futures markets are pricing in expectations for the central bank to begin dialing back stimulus in the first quarter of 2016.
The Australian Dollar outperformed in overnight trade after the Reserve Bank of Australia kept interest rates unchanged at 2.25 percent. As we discussed in our weekly forecast, analysts narrowly expected the outcome but traders were pricing in a 75 percent probability of a 25bps reduction. RBA Governor Glenn Stevens said further easing may be appropriate and policymakers will continue to assess the case for such action at forthcoming meetings.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:30 | AUD | AiG Perf of Services Index (MAR) | 50.2 | - | 51.7 |
| 23:50 | JPY | Official Reserve Assets ($) (MAR) | 1245.3B | - | 1251.1B |
| 1:30 | AUD | Retail Sales (MoM) (FEB) | 0.7% | 0.4% | 0.5% |
| 1:30 | AUD | ANZ Job Advertisements (MoM) (MAR) | -1.4% | - | 0.7% |
| 4:30 | AUD | RBA Cash Rate Target | 2.25% | 2.25% | 2.25% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 7:00 | CHF | Foreign Currency Reserves (MAR) | 508.9B | 509.3B | Low |
| 7:45 | EUR | Markit/ADACI Italy Services PMI (MAR) | 51.0 | 50.0 | Low |
| 7:45 | EUR | Markit/ADACI Italy Composite PMI (MAR) | - | 51.0 | Low |
| 7:50 | EUR | Markit France Services PMI (MAR F) | 52.8 | 52.8 | Low |
| 7:50 | EUR | Markit France Composite PMI (MAR F) | 52.0 | 51.7 | Low |
| 7:55 | EUR | Markit Germany Services PMI (MAR F) | 55.3 | 55.3 | Medium |
| 7:55 | EUR | Markit/BME Germany Composite PMI (MAR F) | 55.3 | 55.3 | Medium |
| 8:00 | EUR | Markit Eurozone Services PMI (MAR F) | 54.3 | 54.3 | Medium |
| 8:00 | EUR | Markit Eurozone Composite PMI (MAR F) | 54.1 | 54.1 | Medium |
| 8:30 | GBP | Official Reserves Changes ($) (MAR) | -1049M | Low | |
| 8:30 | EUR | Eurozone Sentix Investor Confidence (APR) | 20.8 | 18.6 | Low |
| 8:30 | GBP | Markit/CIPS UK Services PMI (MAR) | 57.0 | 56.7 | High |
| 8:30 | GBP | Markit/CIPS UK Composite PMI (MAR) | - | 56.7 | High |
| 9:00 | EUR | Eurozone PPI (MoM) (FEB) | 0.1% | -0.9% | Medium |
| 9:00 | EUR | Eurozone PPI (YoY) (FEB) | -2.9% | -3.4% | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.0704 | 1.0830 | 1.0876 | 1.0956 | 1.1002 | 1.1082 | 1.1208 |
| GBPUSD | 1.4691 | 1.4801 | 1.484 | 1.4911 | 1.4950 | 1.5021 | 1.5131 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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