Yesterday’s market movers
- Euro was firm against dollar (EUR/USD) but failed to stay above the 1.4000 level due to Moody downgrading Portugal’s rating from A1 to A3. Despite the prediction of EFSF (European Financial Stability Facility) reducing the finance costs, there is still less confidence of the Portuguese re-entering the capital market.
- Regarding the fundamental, UK Average Earnings in including Bonus rose to 2.3% in Jan and excluding Bonus dipped to 2.2%. The focused unemployment rate rose to 8.0% from 7.9% in the 3 months since January. Claimant count dropped by 10.2K in Feb from 1.5K. The mixed figures pulled GBP/USD above 1.61 but then lost momentum and performed weaker than the European “safe heavens” since speculators are concentrating on avoiding risky assets.
- EU Core CPI YoY edged lower from 1.1% to 1% while CPI YoY increased from 2.3% to 2.4%. Given the fact ECB has already signaled a hike in April even though the Japanese crisis raised some uncertainties on it, EUR/USD remained above 1.3850 level.
- From US, new residential construction and PPI were featured. Housing Starts fell in the US and PPI rose 1.6% MoM and 5.6% YoY. Risk aversion still dominate the market, US dollar gained mildly across the broad.
Today’s market movers
- EU construction output MoM and YoY for January are to be released this morning. Should we see a rise in this we will see further strength in the Euro zone.
- In the afternoon in the US we will have a couple of positive figures coming out according to the market consensus: CPI February, Jobless Claim and Industrial Production February. This might relieve the risk aversion and give the investors more confidence of non-Asian market.