Daily Market Report 31/03/2014

EUR

Despite data revealing that the Eurozone inflation dropped further than expected to 0.5%, the Euro has surprisingly gathered strength this morning.

The data will put Mario Draghi and the European Central Bank under pressure on Thursday, in this month’s monetary policy meeting. Whilst interest rates remain at historical lows, the ECB could unveil monetary easing measures to combat the lower rate of inflation.

GBP

Britain's housing market could be heading for a bubble were as new data suggests that demand is far outstripping supply.

Property research firm Hometrack, suggested more house price growth ahead as demand grew 6.6% in March – which it measures by new buyers registering with agents – and supply rose 1.9%, based on new listings

Hometrack also confirmed that house prices rose 0.6% in March, a slowdown from 0.7% growth in February, on lower growth in London and the south-east.

Also Britain's biggest businesses are preparing to invest £200bn over the next two years as they seek to benefit from the recent upturn in economic growth.

A survey by accountants Deloitte found 80% of companies with a turnover of more than £1bn intend to invest this year, with close to 70% earmarking at least £250m of investments to drive growth. This should see some further sterling strength. However concerns over the UK deficit are also being brought to the surface as the pound strengthens.

USD

The dollar approached a two-week high versus the yen before Federal Reserve Chair Janet Yellen speaks this a and ahead of figures tomorrow that may show U.S. manufacturing strengthened this month.

Employers in the US have roughly added 200,000 jobs in March. Nonfarm payroll figures are due out this Friday.

The US are expecting better data to have a more widespread supportive impact on the USD.

AUD

Australia’s currency pared an advance in March against all Group of 10 peers before a Reserve Bank policy decision tomorrow, when officials are predicted to refrain from lowering borrowing costs for a third-straight time this year.

Key Announcements:

13.55pm – USD – Fed’s Yellen Speech.

14.30pm – USD – Dallas Fed Manufacturing Business Index (Mar): Previously at 0.3.