Daily Market Report 25/02/2014


We had good data from the Germany yesterday with IFO business climate, current assessment and expectations for February all coming in better than expected.

Also some pressure may have been taken off Mario Draghi’s shoulders yesterday after the Eurozone rate of inflation remained at 0.8% beating forecasts of a drop to 0.7%. Recent speculation has been that a fall in inflation may cause the ECB to lower interest rates further; a practice that would typically devalue a currency.

Despite the promising data, movements on the euro were very limited, perhaps due to the fact that the Eurozone rate of inflation remains well below the central bank’s target of 2%.


Data from the US disappointed once again as Markit services PMI fell shy of expectations as well as coming lower than the previous month. The Dallas Fed manufacturing index also fell lower for February from 3.8 to 0.3.

Once again the recent bad weather in the states is being touted as the principal reason behind this and thus as a result, because the bad weather has already been priced in, movements on the US dollar were also very minimal.


Data from Germany this morning has revealed that economic growth for the fourth quarter was 0.4%, higher than the previous estimate of 0.3%. As a result the euro has made marginal gains this morning.

Data from the BBA with regards to mortgage approvals for the month of January in the UK may well give the pound a bit of a boost following its losing streak of last week. Expectations are for approvals to have increased to 47,900 from 46,500.

Consumer confidence and Richmond Fed manufacturing index data is unsurprisingly set to weaken further in February. As above, given that the bad weather is most likely priced in, we would expect limited movements on the US dollar as a result.

Key Announcements:

9.30am – GBP – BBA Mortgage Approvals (Jan): Expected to increase 47,900.

15.00pm – USD – Consumer Confidence (Feb): Expected to decrease to 80.

15.00pm – USD – Richmond Fed Manufacturing Index (Feb): Expected to decrease to 12.