Forex Weekly Outlook: Services PMIs, Fed minutes dominate light data calendar

Kenny Fisher MarketPulse

The US recovery continues to gain traction, while the eurozone has been struggling, hampered by a sluggish vaccine rollout.

German CPI dipped to 0.5% in March, matching the forecast. This was down from 0.7% a month earlier. Eurozone CPI slowed slightly in March. Headline inflation slowed from 1.4% to 1.3%, while Core CPI dropped from 1.1% to 0.9%.

Manufacturing remains a bright spot, with PMIs showing growth throughout the eurozone with readings above the 50-level. Germany looked very strong, with a reading of 66.6.

UK GDP for Q4 of 2020 was revised to 1.3%, up from the initial reading of 1.0%. Manufacturing PMI rose to 58.9 in March, its best showing since February 2011.

Canada’s GDP accelerated to 0.7% in January, up from 0.1% and above the estimate of 0.5%. The Raw Materials Price Index remains high, improving from 5.7% to 6.6%.

In the US, Conference Board Consumer Confidence soared to 109.7 in March, up from a revised reading of 90.4. It was the sharpest one-month gain in almost 18 years.

US Pending Home Sales posted a second straight decline in March. The decline of 10.6% was much sharper than the estimate of -3.1%. The week wrapped up with excellent nonfarm payroll numbers, which came in at 916 thousand. This was up from 379 thousand and crushed the estimate of 652 thousand.

US ISM Services PMI: Monday, 14:00. The services sector continues to show strong growth. The PMI came in at 55.3 in February and is expected to rise to 58.3 in March.
UK Services PMI: Wednesday, 8:30. The Services PMI showed growth in March for the first time in 5 months, accelerating from 49.5 to 56.8. A reading above 50 indicates growth. The final reading is expected to confirm the initial release.
Federal Reserve Minutes: Wednesday, 18:00. The minutes will provide details of the March policy meeting. Investors will be listening carefully to see if the Fed members are concerned over inflation or the rout in the bond markets.
UK Construction PMI: Thursday, 8:30. The PMI improved to 53.3 in March, up from 49.2 beforehand. The final reading should confirm the initial release.
Canada Employment Report: Friday, 12:30. After an impressive gain of 259.2 thousand new jobs in February, job creation is expected to slow to 90.0 thousand in March. The unemployment rate is expected to fall from 8.2% to 8.0%.

Safe trading!

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

EUR/USD stays defensive below 1.1900 as USD recovers

EUR/USD trades in negative territory for the third consecutive day, below 1.1900 in the European session on Thursday. A modest rebound in the US Dollar is weighing on the pair, despite an upbeat market mood. Traders keep an eye on the US weekly Initial Jobless Claims data for further trading impetus.

GBP/USD holds above 1.3600 after UK data dump

\GBP/USD moves little while holding above 1.3600 in the European session on Thursday, following the release of the UK Q4 preliminary GDP, which showed a 0.1% growth against a 0.2% increase expected. The UK industrial sector activity deteriorated in Decembert, keeping the downward pressure intact on the Pound Sterling.

Gold sticks to modest intraday losses as reduced March Fed rate cut bets underpin USD

Gold languishes near the lower end of its daily range heading into the European session on Thursday. The precious metal, however, lacks follow-through selling amid mixed cues and currently trades above the $5,050 level, well within striking distance of a nearly two-week low touched the previous day.

Cardano eyes short-term rebound as derivatives sentiment improves

Cardano (ADA) is trading at $0.257 at the time of writing on Thursday, after slipping more than 4% so far this week. Derivatives sentiment improves as ADA’s funding rates turn positive alongside rising long bets among traders.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.