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European markets higher ahead of central banks and US NFP this week

FXstreet.com (Barcelona) - The German DAX 30 (+1.30%), the French CAC 40 (+1.20%), the Italian FTSE MIB (+0.57%) and the Spanish IBEX 35 (+1.09%) are edging higher on Tuesday, like most European equity indexes, as investors get ready for a festival of central bank policy meetings this week, including the ECB, BoJ and BoE, and US nonfarm payrolls data on Friday.

The German manufacturing PMI came in slightly higher than expected, at 49.0 from 50.3 (consensus at 48.9). It still doesn’t hide the fact that manufacturing turned contractionary in March. The EMU figure eased from 47.9 to 46.8 (consensus of 46.6). The Italian manufacturing PMI eased from 50.8 to 48.3 (consensus at 50.2). The French number had a slight upward move, from 43.9 to 44.0, but still contractionary. The Spanish figure fell from 46.8 to 44.2 (consensus at 46.0). Investors will be awaiting the German CPI report at 12:00 GMT.

In regard to the EMU unemployment rate at 12.0% in February, the highest rate ever in the Euro, “the upshot of this is that wage pressures on inflation will remain very subdued in most of the Eurozone, allowing the ECB to pursue further steps to ease monetary policy. However, we doubt whether all ECB governors agree that the time is ripe to take fresh monetary action”, wrote Martin van Vliet, analyst at ING Bank. “So while we cannot fully rule out a surprise rate cut or new unconventional support on Thursday, the most likely scenario is for the ECB to keep rates on hold and for Draghi to reaffirm that monetary policy will remain accommodative “as long as needed””, he added.

The British FTSE 100 is up by +1.11%. UK money supply fell -0.5% in February, instead of rising 1.1% as expected. The annualized figure improved from -0.8% to +0.5%. Net Lending to Individuals rose £1.6B, beating £0.9B consensus. Consumer credit rose £0.6B, above expectations of £0.3B. Mortgage Approvals disappointed by easing from 54.187K (revised from 54.719K) to 51.653K (consensus at 54.000K).

Futures for the American S&P 500, Nasdaq 100 and Dow Jones are signaling a higher opening between +0.46% and +0.66% ahead of US ISM New York, Factory Orders and Total Vehicle Sales.

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