EUROZONE DATA THE TALK OF MONDAY
A steady stream of Eurozone data will make its way through the markets on Monday. In political news, investors are still evaluating the outcome of Italy’s national election, which delivered a hung parliament with the anti-establishment Five Star Movement set to take top place.
IHS Markit will deliver a deluge of PMI data beginning at 08:15 GMT with reports on Spanish, Italian, French, German and euro-wide services activity. Eurozone services PMI is forecast to come in at 56.7; the Composite indication, which tracks services and manufacturing, is expected to come in at a solid 57.5.
On the PMI scale, anything above 50 signals expansion in economic activity.
At 09:30 GMT, Sentix will report on Eurozone investor confidence for the month of March.
The European Commission’s statistical agency will issue its monthly retail sales report at 10:00 GMT. Receipts at retail stores are forecast to rise 0.3% in January, which translates into a year-over-year gain of 2.2%.
Shifting gears to North America, Markit and the Institute for Supply Management (ISM) will each issue respective PMI reports for the month of February. ISM’s non-manufacturing PMI is forecast to ease slightly to 59.4 from 59.9 the previous month.
Earlier in the day, Caixin China’s services PMI showed a slight drop in the country’s non-manufacturing industries. The services PMI slipped to 54.2 from 54.7 in January.
Europe’s common currency snapped back to health on Friday, rising more than 50 pips against the dollar to reclaim the 1.2300 handle. The EUR/USD exchange rate was last seen trading at 1.2323 for a daily gain of 0.1%. The pair is trading right around the 20-day moving average and faces immediate support at the psychological 1.2300 level. Economic data throughout the week will influence the direction of this pair, culminating in a report on US nonfarm payrolls on Friday.
Cable extended losses at the end of last week, falling below 1.3800 for the first time in three weeks. GBP/USD was last seen hovering at 1.3789, where it was down around 0.1% from the Friday close. Cable is currently trading within a bearish channel marked by Brexit risks and a rebounding US dollar. In terms of technical levels, immediate support is located at 1.3750.
The dollar-yen exchange rate opened the week in negative territory, extending last Friday’s sharp decline. The USD/JPY was down 0.2% at 105.48, its lowest since 2015. In terms of technical levels, the USD/JPY faces immediate support at 105.20, followed by 104.75. On the opposite side of the ledger, key resistance levels include 105.85 and 106.30. In addition to US data this week, the Japanese government will report on GDP and household spending. On Friday, the Bank of Japan will also deliver a rate verdict.