Forex Today: Euro hit by Italy hung parliament, UK services PMI eyed

Dhwani Mehta FXStreet

The Euro witnessed a mixed start to the week, initially having received a boost following the weekend’s German SPD’s vote in favor of the coalition deal. However, the upside was short-lived as sentiment soured on the Italian election’s projected outcome of a hung parliament, with both the anti-establishment 5-Star Movement and the far-right League party outperforming in the first exit polls.

Meanwhile, the US dollar found some love against the Antipodeans, as downbeat Chinese Caixin services PMI weighed down on both the Aussie and Kiwi. The USD/JPY pair, however, traded with sizeable losses amid risk-off market profile, reflected by negative Asian equities and Treasury yields.

Among the commodities, gold prices remained well bid near $ 1330 levels while both crude benchmarks also traded higher amid the Libyan Sharara oilfield shutdown news and ahead of the OPEC meeting with the US shale firms.

Main topics in Asia

European Politics in focus start of week: Italian election / German coalition risks

Italy’s ruling centre-left Democratic Party admits defeat - The Guardian

Berlusconi's right-wing coalition leads Italy's election: RAI state television

China's Caixin services PMI eases in Feb, misses expectations

Trump trade advisor sees business exemptions to tariffs - Reuters

New Zealand Treasury - there is still some spare capacity in the labour market

China to cut import tariff on auto, some consumer goods: NDRC - Bloomberg

Key Focus ahead

The European calendar sees a busy start to a fresh week, with the final services PMI reports from the Euro area economies due on the cards ahead of the UK services PMI and Eurozone Sentix Investor Confidence. Meanwhile, the US docket offers a set of services PMI reports from Markit and ISM ahead of the FOMC member Quarles speech.

EUR/USD bearish bets lose value despite prospects of hung parliament in Italy

GBP/USD looks weaker than ever ahead of UK services PMI release

Key events for the week ahead - Nomura

RBA to be a non-event this week, or? - Westpac

Australia Jan retail trade to reverse most of the previous fall - ANZ

GMT	Event	Actual	Consensus	Previous
Sunday, Mar 04
24h	EUR Parliamentary elections
Monday, Mar 05
24h	KRW Children's Day
24h	AUD Labour Day
00:30	HKD Nikkei Manufacturing PMI	51.7		51.1
00:30	JPY Markit Services PMI	51.7	52.0	51.9
00:30	AUD Building Permits (MoM)	17.1%	4.0%	-20.6% Revised from -20.0%
00:30	AUD Building Permits (YoY)	12.0%		-5.0% Revised from -5.5%
00:30	AUD ANZ Job Advertisements	-0.3%		6.2%
00:30	AUD Company Gross Operating Profits (QoQ)	2.2%	-2.2%	-0.1% Revised from -0.2%
01:45	CNY Caixin China Services PMI	54.2		54.7
06:00	EUR Purchasing Manager Index Services			59.8
06:00	RUB Purchasing Manager Index Services			55.1
07:00	TRY Producer Price Index (MoM)			0.99%
07:00	TRY Producer Price Index (YoY)			12.14%
07:00	TRY Consumer Price Index (MoM)			1.02%
07:00	TRY Consumer Price Index (YoY)			10.35%
07:00	DKK Industrial Production (MoM)			0.7%
08:00	HUF Retail Sales (YoY)			5.9%
08:15	EUR Markit Services PMI		56.4	56.9
08:30	SEK Current Account (QoQ)			50.7B
08:45	EUR Markit Services PMI		57.0	57.7
08:50	EUR Markit PMI Composite		57.8	57.8
08:50	EUR Markit Services PMI		57.9	57.9
08:55	EUR Markit PMI Composite		57.4	57.4
08:55	EUR Markit Services PMI		55.3	55.3
09:00	EUR Markit Services PMI		56.7	56.7
09:00	EUR Markit PMI Composite		57.5	57.5
09:30	GBP Markit Services PMI		53.3	53.0
09:30	EUR Sentix Investor Confidence		31.0	31.9
10:00	EUR Gross Domestic Product n.s.a (YoY)			1.3%
10:00	EUR Retail Sales (YoY)		2.1%	1.9%
10:00	EUR Retail Sales (MoM)		0.3%	-1.1%
11:30	CLP IMACEC			2.6%
14:45	USD Markit Services PMI		54.6	55.9
14:45	USD Markit PMI Composite		55.5	55.9
15:00	USD ISM Non-Manufacturing PMI		59.0	59.9
16:30	USD 3-Month Bill Auction			1.645%
16:30	USD 6-Month Bill Auction			1.83%
18:15	USD Fed's Quarles speech
23:00	KRW Current Account Balance			4.66B
Tuesday, Mar 06
00:00	COP Consumer Price Index (MoM)			0.63%
00:00	COP Consumer Price Index (YoY)			3.68%
00:01	GBP BRC Like-For-Like Retail Sales (YoY)		0.4%	0.6%
00:30	AUD Current Account Balance		-12.6B	-9.1B
00:30	AUD Retail Sales s.a. (MoM)		0.4%	-0.5%
03:30	AUD RBA Rate Statement
03:30	AUD RBA Interest Rate Decision		1.5%	1.5%
08:00	HUF Gross Domestic Product (YoY)			4.4%
08:15	CHF Consumer Price Index (MoM)		0.2%	-0.1%
08:15	CHF Consumer Price Index (YoY)		0.5%	0.7%
08:30	SEK Industrial Production (YoY)			8.1%
08:30	SEK Industrial Production (MoM)			0.8%
08:30	SEK New Orders Manufacturing (YoY)			5.8%
n/a	GBP 30-y Bond Auction			1.81%
10:00	EUR Wholesale Prices n.s.a (YoY)			3.3%
10:00	EUR Wholesale Prices n.s.a (MoM)			0.9%
11:00	BRL Industrial Output (YoY)			4.3%
11:00	BRL Industrial Output (MoM)			2.8%
12:30	USD Fed's William Dudley speech
13:00	RUB Consumer Price Index (MoM)			0.3%
13:55	USD Redbook index (MoM)			-0.6%
13:55	USD Redbook index (YoY)			3.3%
14:00	MXN Consumer Confidence			84.2
14:00	MXN Consumer Confidence s.a			85.9
n/a	NZD GDT Price Index			-0.5%
14:30	TRY Treasury Cash Balance			-1.55B
15:00	USD Factory Orders (MoM)		-1.3%	1.7%
n/a	USD IBD/TIPP Economic Optimism (MoM)			56.7
15:00	CAD Ivey Purchasing Managers Index			51.3
15:00	CAD Ivey Purchasing Managers Index s.a		56.3	55.2
16:30	USD 4-Week Bill Auction			1.495%
18:15	GBP MPC Member Haldane Speech
21:30	USD API Weekly Crude Oil Stock			0.933M
21:35	AUD RBA's Governor Philip Lowe Speech
22:30	USD FOMC Member Brainard Speech
22:30	AUD AiG Performance of Construction Index			54.3
23:00	KRW Consumer Price Index Growth		0.5%	0.4%
23:00	KRW Consumer Price Index Growth (YoY)		1.2%	1.0%
23:50	JPY JP Foreign Reserves			$1,268.5B
Wednesday, Mar 07
00:30	AUD Gross Domestic Product (YoY)		2.2%	2.8%
00:30	AUD Gross Domestic Product (QoQ)		0.5%	0.6%
01:30	USD FOMC Member Kaplan Speech
05:00	JPY Leading Economic Index		107.8	107.4
05:00	JPY Coincident Index		119.5	120.2
07:00	RON Gross Domestic Product			6.9%
07:45	EUR Exports, EUR			€41.6B
07:45	EUR Trade Balance EUR			€-3.47B
07:45	EUR Imports, EUR			€45.1B
07:45	EUR Current Account			€-0.9B
08:00	CNY Foreign Exchange Reserves (MoM)			¥3.161T
08:00	HUF Industrial Output (YoY)			-0.5%
08:00	CHF Foreign Currency Reserves			731B
08:30	GBP Halifax House Prices (MoM)		0.0%	-0.6%
08:30	GBP Halifax House Prices (3m/YoY)		2.4%	2.2%
09:00	SGD Foreign Reserves (MoM)			282.4B
09:00	CZK FX Reserves			€121.81B
09:30	ZAR Business Confidence Index			99.7
10:00	EUR Gross Domestic Product s.a. (YoY)		2.7%	2.7%
10:00	EUR Gross Domestic Product s.a. (QoQ)		0.6%	0.6%
n/a	EUR 10-y Bond Auction			0.9%
11:00	EUR Retail Sales (MoM)			-0.1%
11:00	EUR Retail Sales (YoY)			7.2%
n/a	CLP Trade Balance			$1,210M
12:00	USD MBA Mortgage Applications			2.7%
12:00	PLN NBP Base rate			1.5%
13:00	USD FOMC Member Bostic speech
13:00	USD Fed's William Dudley speech
13:00	PLN Central Bank FX Reserves			€20.3B
13:15	USD ADP Employment Change		195K	234K
13:15	CAD Housing Starts s.a (YoY)
13:30	USD Trade Balance		$-54.1B	$-53.1B
13:30	USD Unit Labor Costs		2.1%	2.0%
13:30	USD Nonfarm Productivity		-0.2%	-0.1%
13:30	CAD Labor Productivity (QoQ)		0.3%	-0.6%
13:30	CAD International Merchandise Trade			$-3.19B
13:30	CAD Exports			$46.51B
13:30	CAD Imports			$49.7B
15:00	CAD BOC Rate Statement
15:00	CAD BoC Interest Rate Decision		1.25%	1.25%
15:30	USD EIA Crude Oil Stocks change		1.378M	2.483M
19:00	USD Fed's Beige Book
20:00	USD Consumer Credit Change		$17.70B	$18.45B
21:45	NZD Manufacturing sales			0.3%
23:50	JPY Bank lending (YoY)		2.1%	2.4%
23:50	JPY Gross Domestic Product (QoQ)		0.0%	0.1%
23:50	JPY Gross Domestic Product Deflator (YoY)		-0.1%	0.0%
23:50	JPY Gross Domestic Product Annualized		0.7%	0.5%
23:50	JPY Foreign investment in Japan stocks			¥-53.6B
23:50	JPY Foreign bond investment			¥201.3B
23:50	JPY Trade Balance - BOP Basis		¥271.0B	¥583.9B
23:50	JPY Current Account n.s.a.		¥-23.9B	¥797.2B
Thursday, Mar 08
24h	RUB Women's Day
00:01	GBP RICS Housing Price Balance		17.1%	8.0%
00:30	AUD Exports			2%
00:30	AUD Imports			6%
00:30	AUD Trade Balance		-2,372M	-1,358M
02:00	CNY Imports (YoY)			36.9%
02:00	CNY Trade Balance CNY			135.8B
02:00	CNY Exports (YoY)			11.1%
02:00	CNY Exports (YoY) CNY			6%
n/a	CNY Trade Balance USD			$20.34B
02:00	CNY Imports (YoY) CNY			30.2%
05:00	JPY Eco Watchers Survey: Outlook		52.8	52.4
05:00	JPY Eco Watchers Survey: Current		52.7	49.9
05:30	EUR Consumer Price Index n.s.a (YoY)			1.5%
06:45	CHF Unemployment Rate s.a (MoM)		3%	3%
07:00	EUR Factory Orders s.a. (MoM)			3.8%
07:00	EUR Factory Orders n.s.a. (YoY)			7.2%
07:00	TRY Industrial Production (YoY)			8.7%
07:00	NOK Manufacturing Output			1.3%
08:00	HUF Consumer Price Index (YoY)			2.1%
08:00	HUF Core Consumer Price Index (YoY)			2.5%
08:00	CZK Unemployment Rate			3.9%
10:00	EUR Unemployment Rate (MoM)			20.9%
11:00	CLP Consumer Price Index (Inflation) (MoM)			0.5%
11:00	CLP Core Consumer Price Index (Inflation) (MoM)			0.3%
11:00	EUR Gross Domestic Product (QoQ)			4.2%
11:00	EUR Gross Domestic Product (YoY)			10.5%
12:30	USD Challenger Job Cuts (YoY)			44.653K
12:45	EUR ECB Deposit Rate Decision			-0.4%
12:45	EUR ECB Interest Rate Decision			0%
13:00	RUB Central Bank Reserves $			$450.9B
13:15	CAD Housing Starts s.a (YoY)		217.4K	216.2K
13:30	USD Initial Jobless Claims		223K	210K
13:30	USD Continuing Jobless Claims		1.898M	1.931M
13:30	EUR ECB Monetary policy statement and press conference
13:30	CAD Building Permits (MoM)		-1.9%	4.8%
13:30	CAD New Housing Price Index (MoM)		0.3%	0.0%
13:30	CAD New Housing Price Index (YoY)			3.3%
14:00	MXN Headline Inflation			0.53%
14:00	MXN Core Inflation			0.28%
14:00	MXN 12-Month Inflation			5.55%
15:30	USD EIA Natural Gas Storage change		-33B	-78B
20:35	CAD BoC Gov Council Member Lane Speech
21:45	NZD Electronic Card Retail Sales (MoM)			1.4%
21:45	NZD Electronic Card Retail Sales (YoY)			3.4%
22:00	PEN Interest rate decision
23:30	JPY National CPI Ex Food, Energy (YoY)		0.9%	0.3%
23:30	JPY Overall Household Spending (YoY)		-0.3%	-0.1%
23:50	JPY Money Supply M2+CD (YoY)		3.3%	3.4%
Friday, Mar 09
00:00	JPY Labor Cash Earnings (YoY)		0.7%	0.7%
01:30	CNY Producer Price Index (YoY)			4.3%
01:30	CNY Consumer Price Index (MoM)			0.6%
01:30	CNY Consumer Price Index (YoY)			1.5%
n/a	JPY BoJ Press Conference
04:00	JPY BoJ Interest Rate Decision			-0.1%
04:00	JPY BoJ Monetary Policy Statement
06:00	JPY Machine Tool Orders (YoY)			48.8%
07:00	EUR Industrial Production n.s.a. w.d.a. (YoY)			6.5%
07:00	EUR Industrial Production s.a. (MoM)			-0.6%
07:00	EUR Imports (MoM)			1.4%
07:00	EUR Current Account n.s.a.			€27.8B
07:00	EUR Exports (MoM)			0.3%
07:00	EUR Trade Balance s.a.			€21.4B
07:00	DKK Trade Balance			6.4B
07:00	EUR Industrial Output (MoM)			4.2%
07:45	EUR Industrial Output (MoM)			0.5%
07:45	EUR Budget			€-67.8B
08:00	EUR Industrial Output Cal Adjusted (YoY)			6.1%
08:00	HUF Trade Balance			€513M
08:00	CZK Foreign Trade Balance (MoM)			-2.2B
08:00	EUR Foreign Trade Balance			€8.5M
09:00	EUR Producer Price Index (YoY)			2%
09:00	EUR Producer Price Index (MoM)			0%
n/a	ISK Gross Domestic Product (QoQ)			2.2%
n/a	ISK Gross Domestic Product (YoY)			3.1%
09:30	GBP Consumer Inflation Expectations			2.9%
09:30	GBP Manufacturing Production (MoM)		-0.1%	0.3%
09:30	GBP Industrial Production (MoM)		0.0%	-1.3%
09:30	GBP Industrial Production (YoY)		0.9%	0.0%
09:30	GBP Manufacturing Production (YoY)		1.9%	1.4%
09:30	GBP Total Trade Balance			£-4.896B
09:30	GBP Goods Trade Balance		£-12.363B	£-13.576B
09:30	GBP Trade Balance; non-EU		£-4.12B	£-5.18B
n/a	EUR 12-Month Letras Auction			-0.419%
n/a	EUR 6-Month Letras Auction			-0.472%
10:00	EUR Consumer Price Index (YoY)			-0.2%
n/a	EUR Consumer Price Index - Harmonized (YoY)			0.2%
10:00	EUR Trade Balance			€12.2M
11:00	BRL IPCA Inflation			0.29%
11:30	INR FX Reserves, USD			$420.59B
13:00	GBP NIESR GDP Estimate (3M)		0.3%	0.5%
13:30	USD Nonfarm Payrolls		190K	200K
13:30	USD Average Weekly Hours		34.4	34.3
13:30	USD Average Hourly Earnings (YoY)		2.5%	2.9%
13:30	USD Unemployment Rate		4.1%	4.1%
13:30	USD Average Hourly Earnings (MoM)		0.3%	0.3%
13:30	USD Labor Force Participation Rate		62.5%	62.7%
13:30	EUR Employment Change (YoY)			1.7%
13:30	EUR Employment Change (QoQ)			0.4%
13:30	CAD Capacity Utilization		85.7%	85.0%
13:30	CAD Net Change in Employment		68.5K	-88.0K
13:30	CAD Participation rate		65.6%	65.5%
13:30	CAD Unemployment Rate		5.8%	5.9%
15:00	USD Wholesale Inventories		0.2%	0.7%
17:45	USD Fed's Evans Speech
18:00	USD Baker Hughes US Oil Rig Count			800
19:30	USD CFTC Gold NC net positions
19:30	USD CFTC Oil NC net positions
19:30	USD CFTC USD NC net positions
19:30	GBP CFTC GBP NC net positions
19:30	JPY CFTC JPY NC net positions
19:30	EUR CFTC EUR NC net positions
19:30	AUD CFTC AUD NC net positions

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.