As the markets continue to yearn for a Spanish bailout, increasingly it appears that whatever is happening in reality is being rendered non-pertinent.
Yesterday the euro saw gains against many of its peers, as Reuters fueled speculation of a bailout announcement this weekend. When quizzed on the matter, Prime Minister Rajoy was quick to quell the conjecture by expressing that such a move was not imminent, leading to a later adjustment to the early gains.
The pound appreciated against the dollar as construction PMI moved closer towards reaching the point of expansion, whilst today a similar indicator for the services sector released across the UK, euro zone and America should generate movement.
The expected contraction in euro services PMI is opposed by expansions forecast for the UK and US. In recent times we have seen encouraging economic data in the States signal a flight to the euro, in this instance however, if euro zone’s service sector proves to be the antithesis to US data, such previous trends could be neutralized.
Euro zone retail sales will also be an important announcement, giving an indication to the consumer spending levels in the region. A contraction of 0.1% is expected.
Having said all of this, if as continues to be the current mode of market movements, the economic data released today could well be offset, or even ignored, in preference for mere whispers of the word ‘bailout’…
Today’s Key Announcements:
- 09.00am – EUR – Final Services PMI: A contraction but slightly above the expected level at 46.1
- 09.30am – GBP – Services PMI: level expected to decrease to 53.1, however still well above the level of contraction.
- 10.00am – EUR – Retail Sales: an improvement predicted to 0.1% contraction
- 13.15pm – USD – Non-Farm Employment Change: decline expected to 145k
- 15.00pm – USD – ISM Non-Manufacturing PMI – 53.2 expected down from 53.7
See previous Daily Market Reports