Tomorrow’s Crucial UK Data in Focus
In the absence of major economic updates in the UK today, Sterling traders are likely to remain on the side lines ahead of tomorrow’s crucial labour market report in the UK. The print is anticipated to show that hiring pace in the country remained robust and domestic wage growth continued to outpace the nation’s inflation. Additionally, the minutes of the BoE’s latest policy meeting is scheduled for release tomorrow which will attract significant attention among investors.
Across the Atlantic, after yesterday’s subdued economic data, traders will eye today’s housing market report in the US for further direction. In the Euro zone, March’s ZEW survey is anticipated to show that morale among domestic investors improved for a fifth consecutive month.
Pound Sterling – UK Markets
Yesterday, the Pound recovered some of its previous session losses, triggered by last week’s dovish remarks by the BoE Chief, Mark Carney, wherein he hinted about prospects of a delay in the timing of an interest rate rise in the nation. Data released by Rightmove revealed that house prices in the UK registered its third consecutive rise in March. The report further showed that supply in Britain’s housing market improved, although availability for the type of homes targeted by first time buyers remains limited. Considering that new rules applicable from next month in the UK will permit retirees to use their pension funds to invest in the real estate segment, the case of a shortage in Britain’s housing market cannot be ruled out going forward.
With little on the domestic macroeconomic front, the Pound is trading on a weaker footing against the majors this morning. Moving ahead, in tomorrow’s trading session, Sterling investors will keep a tab on Britain’s employment survey for the three months ended January which is anticipated to show that hiring pace in the nation remained robust and domestic wage growth continued to outpace UK’s inflation.
US Dollar – US Markets
The US Dollar nudged lower against the major currencies yesterday, as traders turned cautious ahead of the upcoming FOMC policy meeting. Besides, disappointing macro data from US dampened optimism over the strength of the nation’s economy. NAHB’s report on the US housing market showed that homebuilder confidence declined unexpectedly for March, largely due to supply chain issues and labour shortages. Separately, industrial production in the US reported a modest rise for February amid cold weather. Meanwhile, the NY Empire state manufacturing index declined unexpectedly for a third straight month for February.
Market participants will get a clearer picture of the housing recovery in the US from housing starts and building permits for February, scheduled for release later today. Meanwhile, the greenback is trading on a weaker footing against most of its major counterparts this morning, as investors look forward to tomorrow’s statement from the US Federal Reserve which may offer hints about the stance that the central bank may adopt in 2015.
Euro – European Markets
The Euro is trading higher against its key peers this morning, amid a relatively light calendar for the Euro area. The German and Euro zone ZEW surveys are the key releases in the Euro region today. The survey on Germany’s economic outlook is expected to show another round of improvement for March after several key indicators, including industrial production and retail sales, released this month showed robust growth. The recent commencement of the ECB’s bond buying programme will add strength to the economic sentiment for March. Separately, the final consumer price reading for the Euro zone in February will also be closely tracked.
The single currency climbed against the US Dollar yesterday. The ECB announced that it has spent €9.75 billion in buying bonds in the first week of its asset purchase programme. Separately, in his speech, the ECB President, Mario Draghi, stated that the stimulus measures will stabilise inflation in line with the bank’s target and that a sustained economic recovery was taking hold in the Euro zone.
Other Currencies – Highlights
The Australian Dollar has rebounded after dropping against the US Dollar earlier this morning following the release of minutes of the RBA’s meeting in March. The RBA, in its 3 March meeting, had kept the official cash rate unchanged at 2.25%. The minutes of the meeting revealed that the central bank is open to further rate cuts, if required, to boost the economy. However, the central bank expressed concerns about the rise in house prices and commercial properties in some key markets. The RBA indicated that it would wait for more economic data and also provide the nation’s economy some time to adjust to the earlier rate cut, before taking a further decision on rates. Moving ahead, investors will keep a tab on the Westpac leading index, scheduled later today, to gauge the pace of economic growth in Australia for February.
The Australian Dollar edged higher against the US Dollar yesterday, following upbeat Australian motor vehicle sales data and muted economic data from the US.