Daily Market News 28 Mar 2011

Friday’s Market Movers

On Friday morning we had three pieces of data out from Germany which came in the form of the IFO business climate figure which came out better than expected than previous. We had the IFO Current Assessment figure we also came out better than expected than previous and finally we had IFO expectation figure which came out slightly worse than expected than previous. These surveys have shown that the business climate in Germany at the moment is strong and is expected to stay that way in the future. These pieces of data helped the Euro stay strong throughout the day.

Also from Europe we had the M3 money supply (QoQ) and (YoY), both these figures came out better than previous showing that there is more currency in circulation in Europe. This is another figure that indicates pressure on inflation in Europe, which also leads us to believe that a rate hike is coming. This figure led Sterling to fall to the low of the year against the Euro. (GBP/EUR)

In the US on Friday we had the Gross domestic Product come out better than previously expected. This good figure led to a lot more risk appetite into the market leading to the USD losing grounds against a lot of its counterparts. However the Real Personal Consumption (QoQ) figure from the US which came out a lot worse than previously did stop the US dollar losing too much ground.

The first piece of data out today is the United States Personal Consumption Expenditures (MoM), this measures the level of expenditure in the economy and can be used to analyse consumer confidence. This is expected to come out a lot better than previous and could lead to the dollar weakening due to more risk appetite in the market.

Also from the US today is the Personal income figure (MoM) expected worse than previous and the pending Home Sales figure (MoM) expected much better than previous. As the housing market in the US is considered a sensitive factor to the economy with this figure being strong, we are likely to see more risk appetite in the market and could see the dollar weaken. Also we may see more investors move into the euro on the expectations of a rate hike.