Daily Market Report 18/03/2014


The euro continued to remain well supported against both the pound and the US dollar despite inflationary data disappointing with the rate falling to its lowest ever level of 0.7% in February from 0.8% in January.

It appears that although inflation is falling, markets are probably being more attentive to what members of the ECB stated last week that fears of deflation are subsiding and a cut in interest rates would not be beneficial to the single bloc area.


The US dollar experienced very minimal movement yesterday following mixed data.

Manufacturing output measured by the NY Empire State Index rose in March to 5.61 from 4.48 in February, but failed to live up to an expected rise to 6.50. Motor vehicle output rose by 4.8% and there were also notable gains in machinery and fabricated metal products.

On the plus side for the US dollar, industrial production rose by 0.6% beyond an expected increase of 0.2%.


Euro strength could well be undermined today with economic sentiment figures set to be released following the recent ZEW survey. Sentiment is set to fall from 55.7 to 53 in Germany and from 68.5 to 67.3 in the Eurozone as a whole.

Trade balance data from the Eurozone is set to show the €13.9bn surplus in December has decreased to now show a deficit of -€2.5bn.

Later in the afternoon, data is set to reveal that US rate of inflation is set to have fallen from 1.6% to 1.2% in February. This could well put the US dollar under further pressure, given that the pound has found support again following its fall since March 7th.

Key Announcements:

10.00am – EUR – Trade Balance (Jan): Expected to show a deficit of €2.5bn.

10.00am – EUR – German ZEW Survey on Economic Sentiment (Mar): Expected to drop to 53.

10.00am – EUR – Eurozone ZEW Survey on Economic Sentiment (Mar): Expected to drop to 67.3.

12.30pm – USD – Building Permits (Feb): Expected to have increased to 960,000.

12.30pm – USD – Consumer Price Index (Feb): Expected to have fallen to 1.2%.

12.30pm – USD – Housing Starts (Feb): Expected to increase to 910,000.