EUROZONE SENTIMENT INDICATORS DRIVE HEADLINES ON TUESDAY
The economic calendar is back in full swing on Tuesday, with a steady stream of European data set to make headlines. Investors can also expect several market-moving releases from the New York session focusing on US manufacturing, housing prices and monetary policy.
Action begins at 06:00 GMT with a report on German import prices for the month of February. The import price index is forecast to fall 0.3% in February, after rising 0.5% the month before.
At 07:00 GMT, the Spanish government will release preliminary inflation data at 07:00 GMT. The harmonized index of consumer prices (HICP) is forecast to rise 1.6% annually for March, up from 1.2% the previous month.
Italy will release a pair of sentiment indicators at 08:00 GMT, including consumer confidence and business confidence. Both readings are forecast to weaken month-on-month. Meanwhile, Portugal is also scheduled to report on consumer and business confidence at 08:30 GMT.
The European Commission’s statistical agency will unveil its sentiment indicators at 09:00 GMT. Economic sentiment, business climate, industrial confidence, consumer confidence and services sentiment will all make headlines.
Shifting gears to North America, S&P/Case-Shiller will report on housing prices at 13:00 GMT. The home price indices are forecast to rise 6.2% annually in January, down from 6.3% the previous month.
The Federal Reserve Bank of Richmond will release its monthly manufacturing index at 14:00 GMT. The monthly gauge is forecast to drop to 23 in March from a reading of 28 the previous month.
In terms of monetary policy, Federal Open Market Committee (FOMC) member Raphael Bostic will deliver a speech at 15:00 GMT. Bostic was part of the policy committee that voted to raise interest rates last week.
Europe’s common currency took advantage of a sliding dollar on Monday to launch itself to fresh five-week highs. The EUR/USD exchange rate is now trading in the mid-1.2500 region following an 80-pip surge at the beginning of the week. The pair is edging closer to the February high, with fundamental cues likely to support the euro in the near term.
Cable opened the week in fine form, as prices surged past 1.4200 for the first time since the beginning of February. At the time of writing, GBP/USD was trading at 1.4231. Momentum returned to cable earlier this month after the UK and the European Union reached an agreement on a Brexit transition deal.
After bottoming at 104.69 on Friday, the USD/JPY has gradually recovered. The pair is now trading comfortably above 105.00, although the near-term outlook remains firmly tilted to the downside. USD/JPY remains in a long-term downtrend, a picture that is unlikely to improve anytime soon as risk-off sentiment supports the yen.