Yesterday's market movers
- Sterling fell from a 13 month high against the US dollar after the release of the UK PMI services figures yesterday morning. PMI fell to 52.6 in February from an eight month high of 54.5 the month prior. This was seen as a factor for sterling losing ground against the greenback; however towards the end of the afternoon session we did see sterling recover trading back above 1.6300 due to strength of the euro against the US dollar.
- We had a string of data from the euro zone yesterday firstly coming in the way of German retail sales which came in a lot better than expected both MoM and YoY. This is continuing to show that consumers in Germany are starting to return to the high street. The euro had little reaction to these figures as many dealers were adjusting positions ahead of the ECB meeting.
- This was followed by European retail sales which also came in better than the month prior. This continued to show that like the German figures confidence is starting to enter the euro zone.
- European GDP QoQ and YoY were also released better than the previous month which gave the euro a small spike against the US dollar and British pound. This is continuing to show growth within the euro zone as a whole
- The only piece of negative data from the euro zone was from Germany’s PMI and European PMI which came in lower than expectations. However it is still above the key 50 mark and being these two pieces of data are from services sector and not manufacturing these figures had little effect towards the euro.
- The final piece of data from the eurozone was arguably the most important and was from ECB regarding interest rates. As expected rates in euro land were left unchanged at 100bps the euro remained flat against its major counterparts trading in narrow ranges before ECB chief Jean Claude Trichet made his traditional speech regarding all matters towards the euro.
- During the meeting the euro rose over one cent against the US dollar and over half a cent against the British pound with comments from Jean Claude Trichet that a rate rise is inevitable but not as aggressively as many investors had expected. Trichet also added that we could see rate rise as early as next month which added to the euro gains against its major counterparts trading at its highest levels since September 2010 at 1.3975 before retreating towards the end of the day.
- The main data from the United States yesterday came in the form of Initial jobless claims and from the ISM. Initial jobless claims were released better than expected however any movement in the US dollar was absurd by euro strength following comments from the ECB regarding rates.
- Following up from the jobless claims were ISM which came out in line with expectations this was the 6 month in succession that the figures were higher. These numbers did little to move the US dollar as possible risks appreciate entered the market.
Today's market movers
- The only piece of data from the UK today is from the Halifax House price index, which in came in both lower on the MoM and YoY. These figures had very little effect towards the pound as many investors will be paying more attention to US figures later on this afternoon.
- There is no data from the euro zone today.
- The main data from the United States today is from US Non Farm payroll and unemployment rate. After a positive ADP report number on Wednesday many investors are expecting a positive Non Farm number. The expectations are to see a stronger figure which could possibly add to US dollar gains if fundamentals are applied. However on the other hand an uptick in the employment rate could see a counter balance.