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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Source: Daily fx