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Session Recap: Broad gains for the dollar

The US dollar remains buoyed on Friday as soft global data and the 'sequester' have contributed to the market's cautious mood and benefited the USD for its safe-haven role. US political leaders failed to reach an agreement on alternative budget savings triggering automatic spending cuts. The euro fell below the 1.3000 mark and hit a fresh yearly low at 1.2983, while the pound is among the worst performers, having fallen to a 31-month low of 1.4997 weighed by weaker-than-expected US data. Meanwhile, the CAD found some support from Canadian GDP readings and reversed losses against the greenback. The Aussie and the yen are slightly lower.

Main Headlines in Europe (in chronological order):

Italy Feb Markit Manufacturing PMI down to 45.8 vs 47.8 (Jan)

EMU: PMI Manufacturing unchanged at 47.9 in February

UK: PMI Manufacturing at 47.9 in February

UK news drives the dollar north – the catalyst we needed !

Sequestration reconciliation unsuccessful ahead of final meeting later today

EMU: Unemployment Rate at 11.9% in January

EMU: Flash Annual CPI at 1.8% in February

Stournaras meets Troika in Athens this weekend

ECB-12 banks to repay Eur 4.176 bln of 1st 3 yr LTRO, 54 banks to repay Eur 8.319 bln of 2nd 3 yr LTRO

Euro bearish trend shaping up

Bersani rejects coalition with center-right

Canada: GDP contracted 0.2% MoM in December

Commodities Brief – Precious metals rally on weak US data, crude falls below 91.00

US: Markit Manufacturing PMI rose to 54.3 in February

American equity markets contract after weak US data

American equity markets contract after weak US data

The US Stock market experienced a negative opening as weak US data and lingering doubts over the misunderstood effects of the sequester left a sour taste in investors’ mouths. In the United States, Core Personal Consumption Expenditure – Prices Index (YoY) rose just +1.3% in January, compared +1.4% in the previous month. In addition, the Core Personal Consumption Expenditure – Price Index (MoM) climbed +0.1% in January, missing expectations of +0.2%. Finally, Personal Income (MoM) fell -3.6% in January, coming in at less than the projected value of -2.2%.
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Fundamental Afternoon Wrap: What happened to the sequester?

This weeks final institutional research wrap sees a focus on the weak European PMIs and a surprising lack of content on the US sequester which looks set to come into play. Elsewhere, GBP/USD looks set to continue its nose dive, with 1.40 looking like a viable target.
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