Talking Points:
- Markets likely to be more responsive to upbeat vs. disappointing UK PMI data
- Strong results on 5-year UK bond sale hints traders looked past “Brexit” fears
- Yen fell as Aussie, NZ Dollars rose amid risk appetite recovery in Asian trade
UK PMI data headlines the European data docket. The catch-all Composite index is expected to show the pace of manufacturing- and service-sector activity growth slowed in February after hitting a six-month high in January.
Soft factory-sector and construction PMIs earlier in the week failed to stymie a British Pound recovery. The currency posted the latest daily gain versus the US Dollar in a month in yesterday’s trade after demand rose and yields declined at an auction of five-year bonds, pointing to investors’ confidence despite the looming “Brexit” referendum.
This coupled with an already steep slide in the priced-in BOE rate hike outlook and build-up in speculative net-short exposure is likely to make the UK unit relatively resilient in the face of negative news flow. Alternatively, an upside surprise may fuel unwinding of short GBP positioning, extending the currency’s recovery.
The anti-risk Japanese Yen underperformed while the sentiment-geared Australian and New Zealand Dollars traded higher alongside Asian stock markets as the markets’ mood brightened in overnight trade. The MSCI Asia Pacific regional benchmark equity index rose 0.8 percent.
Losing Money Trading Forex? This Might Be Why.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 21:45 | NZD | Value of All Buildings SA (QoQ) (4Q) | 2.5% | 2.0% | 0.7% |
| 22:30 | AUD | AiG Perf of Services Index (FEB) | 51.8 | - | 48.4 |
| 00:00 | NZD | ANZ Commodity Price (FEB) | 0.4% | - | -2.3% |
| 00:30 | AUD | Trade Balance (JAN) | -2937M | -3200M | -3524M |
| 01:30 | JPY | BOJ Nakaso speaks in Naha | - | - | - |
| 01:45 | CNY | Caixin China PMI Services (FEB) | 51.2 | - | 52.4 |
| 01:45 | CNY | Caixin China PMI Composite (FEB) | 49.4 | - | 50.1 |
| 02:00 | JPY | Nikkei Japan PMI Services (FEB) | 51.2 | - | 52.4 |
| 02:00 | JPY | Nikkei Japan PMI Composite (FEB) | 51.0 | - | 52.6 |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:00 | GBP | Nationwide House Px (MoM) (FEB) | 0.4% | 0.3% | Medium |
| 07:00 | GBP | Nationwide House Px (YoY) (FEB) | 4.9% | 4.4% | Medium |
| 08:30 | GBP | Halifax House Prices (MoM) (FEB) | 0.0% | 1.7% | Low |
| 08:30 | GBP | Halifax House Price (3M/Y) (FEB) | 10.4% | 9.7% | Low |
| 08:45 | EUR | Markit/ADACI Italy Services PMI (FEB) | 52.8 | 53.6 | Low |
| 08:45 | EUR | Markit/ADACI Italy Composite PMI (FEB) | - | 53.8 | Low |
| 08:50 | EUR | Markit France Services PMI (FEB F) | 49.8 | 49.8 | Low |
| 08:50 | EUR | Markit France Composite PMI (FEB F) | 49.8 | 49.8 | Low |
| 08:55 | EUR | Markit Germany Services PMI (FEB F) | 55.1 | 55.1 | Medium |
| 08:55 | EUR | Markit/BME Germany Composite PMI (FEB F) | 53.8 | 53.8 | Medium |
| 09:00 | EUR | Markit Eurozone Services PMI (FEB F) | 53.0 | 53.0 | Medium |
| 09:00 | EUR | Markit Eurozone Composite PMI (FEB F) | 52.7 | 52.7 | Medium |
| 09:30 | GBP | Official Reserves Changes (FEB) | - | $527M | Low |
| 09:30 | GBP | Markit/CIPS UK Services PMI (FEB) | 55.1 | 55.6 | High |
| 09:30 | GBP | Markit/CIPS UK Composite PMI (FEB) | 55.7 | 56.1 | High |
| 10:00 | EUR | Eurozone Retail Sales (MoM) (JAN) | 0.1% | 0.3% | Medium |
| 10:00 | EUR | Eurozone Retail Sales (YoY) (JAN) | 1.3% | 1.4% | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0748 | 1.0803 | 1.0836 | 1.0858 | 1.0891 | 1.0913 | 1.0968 |
| GBP/USD | 1.3673 | 1.3851 | 1.3964 | 1.4029 | 1.4142 | 1.4207 | 1.4385 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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