Euro comfortably above 1.10 into the ECB press conference
Key Notes:
- Australia AIG services 49.6 vs. 49.7 previously
- Australia GDP q/q 0.9% vs. 0.7%; GDP y/y 2.3% vs. 2.1%
- China HSBC services PMI 53.5 vs. 52.9 previously
- UK Nationwide HPI m/m 0.3% vs. 0.4%
- Spain services PMI 58.4 vs. 59.4
- Italy services PMI 52.5 vs. 52.8
- France services PMI 52.8 vs. 51.6
- Germany services PMI 53 vs. 52.9
- Eurozone services PMI 53.8 vs. 53.3
- UK services PMI 56.5 vs. 59.2
- Eurozone retail sales m/m 0.7% vs. 0.7%; y/y 2.2% vs. 2%
- Eurozone unemployment rate 11.1% vs. 11.2%
- ECB rate unchanged at 0.05%
- ADP employment change 201k vs. 200k
- Canada international merchandise trade -2.97bn vs. -2.15bn
- US trade balance -40.9bn vs. -44bn
Later:
- US PMI services
- ISM non-manufacturing
- Crude Oil inventories
The currency markets got off to a busy start with Australian economic data on tap. AIG services index managed a softer print at 49.6 from 49.7 previously. However the markets were focused on the quarterly GDP data which saw a robust growth at 0.9%, beating estimates of 0.7%. On an annualized basis, Australian GDP grew 2.3%, above the 2.1% estimates. The Aussie dollar was trading above 0.77985 earlier in the day and looks to have his resistance at 0.782 into the US trading session.
The Kiwi dollar’s rally seen earlier this week is starting to show signs of fizzling out as the currency failed to hold its gains near 0.7189 and started to drop, trading at 0.7122 at the time of writing.
The Japanese Yen was trading off the broader themes which saw a brief decline yesterday weakened into today’s trading session as the Greenback managed to reverse some of its losses from yesterday. The USDJPY was trading near 124.59 levels at the time of writing.
The European trading session was busy with lot of services PMI data from various countries. Overall, service PMI remained broadly positive including the Eurozone services PMI which increased to 53.8 beating expectations. Retail sales for the Eurozone managed to beat estimates, rising 0.7% for the month, up from -0.6% last month. The Euro managed to surge higher on a weaker Greenback earlier in the day and in the run up to the ECB’s press conference.
The ECB left interest rates unchanged in its meeting and stuck to the usual narrative of continuing to purchase bonds under its QE program. Inflation forecasts for 2015 were upgraded while the ECB Chief noted that inflation should pickup in the second half of the year. The Euro remains volatile to the news conference but looks comfortable trading above 1.11.
From the UK, services PMI fell 56.5 against estimates of 59.2 which saw the Pound Sterling react strongly on the data falling from intraday highs of 1.5374.
The US trading session kicked off with the ADP employment change. Data showed that the US economy added 201k new jobs, well above estimates of 198k but last month’s numbers were revised lower to 165k from 169k originally. Trade balance data also showed a sharp decline on account of rise in exports. The Greenback continued to keep its gains after declining to 95.95 earlier in the day but is still trading below the major resistance of 96.55.
