Mixed labour data from the US fails to support the Dollar

Last week economic data releases all fell below expectations from the Eurozone and the UK. The biggest disappointments came from the UK’s biggest sector; Services where the reading for February fell to its lowest in three years, and from the single currency zone the inflation figure fell back into negative territory and back into deflation. The end of the week however saw the US Non-farm figure smash expectations as it came out at 242k, well above the expected 188k.  However a poor y/y average earnings figure of 2.2%, along with a further fall in their trade balance to -45.7B had the Greenback on the back foot and lose ground against the Pound. 

Today

Today sees no high tier economic data released but this morning has already had a bearish reading from Germany. The powerhouse of the single currency zone saw its factory orders fall and remain in negative territory for a second month in a row. Orders for factories in Germany came in at -0.1% slightly up from Decembers -0.2%, this indicator gives insight into the demand on manufacturers to orders received by producers of goods and is showing the global growth slowdown now impacting this sector.  

Tuesday 

Early hours of this morning will see the Trade Balance released from the world’s second largest economy, China.  As the slowdown of China has rippled through the rest of the world’s economy and concerns remain on a further demand from China, this data will give further insight into their demand and will be scrutinized by the markets.  Also released today is the Eurozone’s revised GDP figure for Q4, which is currently at 0.3%.

  • China Trade Balance
  • Euro Revised GDP

Wednesday 

Some more insight into how the UK is performing at the beginning of this year as the monthly Manufacturing and Industrial production figures are posted. Both currently in negative territory for January, the markets will watch to see if the bearish data of late will continue.  Another poor show of data will start to flag the concerns that a downturn of growth is now coming true for the UK. From the US the oil inventories gauge is posted, which shows how many excess barrels of crude oil is held by commercial companies in the last week.  

  • UK Manufacturing Production m/m
  • UK Industrial Production m/m
  • US Oil Inventories

Thursday 

The main event of the week will be in focus today when the ECB meeting on rate decision will be given, followed by the press conference. The rate is not expected to change from 0.05%, but with the head of the ECB Mario Draghi, already stating previously that the committee are ready to use further stimulus to help tackle inflation pressures and growth, the markets are waiting to see in what form these extra stimulus measures will be if any implemented. No doubt this is the biggest event risk of the week as the current inflation for the Eurozone is in deflationary territory and most now expect action to be taken. 

  • Euro ECB meeting & rate decision
  • US Unemployment claims

Friday 

The week comes to an end and the only piece of data being watched is the UK Trade Balance. The gauge is expected to show more goods imported than expected for February, the figure is due to drop to -10.3B but with a weaker Pound expected from the Brexit concerns, this could help with cheaper goods being exported from the UK. 

  • UK Trade Balance
  • UK Construction Output m/m