Daily Market Report 25/03/2014


Eurozone business activity expanded at a slightly slower pace in March when compared to February. Both the services and manufacturing sectors expanded at 52.4 and 53 against an expected 52.6 and 53.2.

A similar story happened with the data from Germany but France surprised markets with both sectors returning to growth.

Whilst the euro weakened off in early European trade, the single-bloc currency managed to recover and claw back its losses and finished stronger on the day.


PMI manufacturing output came in weaker than expected for March to 55.5 from 57.1 in February, although the output is the second highest since January 2013.

The data adds to evidence that the sector has managed to shrug off the grim weather the country experienced over the last few months and may well contribute heavily to GDP in the first quarter.

Whilst the US dollar experienced some very choppy trading, the overall move was fairly directionless with the US dollar finishing unchanged from the opening of European trading hours to the close.


The Indian rupee continued to strengthen yesterday following improved sentiment over the Indian economy. The Nifty stock market climbed by 1.3% yesterday to a lifetime high of 6,580.90. The rise in the stock market has been attributed to foreign investors, who have needed to buy the rupees for stock purchases.

Risks to inflation, high borrowing rates and a weak industrial sector still pose a challenge for the next government but nonetheless the improving nature of the economy is improving demand for the rupee.


UK inflation is forecasted to drop from 1.9% to 1.7% this morning which could well put pressure on the pound given the link between the movements on the rate of inflation and rate of interest.

The euro continued to be resilient before a report today that is set to reveal that business confidence in Germany held near a 2 ½ year high. ECB president is also set to speak in Paris this afternoon.

Key Announcements:

9.00am – EUR – IFO German Business Climate (Mar): Expected to drop slightly to 111.0.

9.30am – GBP – Consumer Price Index (Feb): Set to fall to 1.7%.

14.00pm – USD – Consumer Confidence (Mar): Set to increase to 78.6.

14.00pm – USD – New Home Sales (Feb): Set to fall to 445,000