It is a busy day ahead for the EUR/USD. Early in the European session, German retail sales figures will draw plenty of interest. With the ECB expecting a pickup in consumption on softer inflation, weak numbers would question the more optimistic economic outlook.
However, manufacturing PMI numbers from Italy and Spain and finalized PMIs from France, Germany, and the Eurozone will also draw interest. Expect revisions to prelim numbers to move the dial. In a busy session, German prelim inflation numbers for February will also need consideration. An unexpected pickup in German inflationary pressures would drive demand for the EUR.
In the latest ECB Economic Bulletin, the ECB noted that rising wage growth and declining energy price inflation should ease the loss of purchasing power and support consumption. Consumer confidence would need to improve to support the ECB’s outlook on consumption. A pickup in inflationary pressures and a slump in retail sales would test the theory.
After the latest stats, investors need to monitor ECB member speeches. However, with no ECB Executive Board members on the calendar to speak today, investors should track ECB Executive Board member commentary with the media.
Ahead of the European session, China PMI numbers for February supported riskier assets and the EUR/USD. The all-important Caixin Manufacturing PMI increased from 49.2 to 51.6 versus a forecasted 50.2.
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