The Euro and the British Pound may come under pressure if soft manufacturing PMIs boost stimulus bets before ECB and BOE rate decisions later in the week.
Talking Points
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Euro, British Pound May Decline as Soft PMIs Boost Stimulus Bets
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Another German CPI Drop Could Amplify ECB Easing Expectations
The round-up of European Manufacturing PMI figures headlines the economic calendar in European hours. The final revision of the region-wide Eurozone gauge is expected to confirm factory-sector activity contracted at the fastest pace in three months in March. Meanwhile, the analogous UK measure is seen edging slightly higher over the same period while but still holding below the critical 50 “boom-bust” threshold, signaling manufacturing shrank for a second consecutive month.
The reports may weigh on the Euro and the British Pound, pushing traders’ monetary policy expectations toward the accommodative side of the spectrum ahead of the ECB and BOE rate decisions on tap later in the week. While neither central bank is forecast to change the policy mix this time around, signs of a deepening slump in the region may prompt the markets to expect a dovish shift in rhetoric foreshadowing added easing on the horizon in the months ahead.
A further slowdown in German CPI inflation would reinforce the likelihood of such a scenario. The year-on-year price growth rate is expected to decline to 1.3 percent in March, marking the weakest reading since December 2010 and hinting that the ECB is being offered increasingly ample room to stimulate growth without worrying about inflationary pressures.
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Asia Session:
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 22:30 | AUD | AiG Performance of Manufacturing Index (MAR) | 44.4 | - | 45.6 |
| 23:00 | AUD | RPData-Rismark House PX Actual (MAR) | 1.3% | - | 0.3% |
| 23:01 | GBP | Lloyds Business Barometer (MAR) | 20 | - | 13 |
| 23:50 | JPY | Monetary Base (YoY) (MAR) | 19.8% | - | 15.0% |
| 0:00 | NZD | ANZ Commodity Price (MAR) | 7.4% | - | 1.1% (R+) |
| 1:30 | JPY | Labor Cash Earnings (YoY) (FEB) | -0.7% | -0.2% | 0.1% (R-) |
| 3:30 | AUD | 3.0% | 3.0% | 3.0% | |
| 5:30 | AUD | RBA Commodity Price Index (MAR) | 87.9 | - | 87.9 (R-) |
| 5:30 | AUD | RBA Commodity Index SDR (YoY) (MAR) | -7.5% | - | -6.5% (R+) |
Euro Session:
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
| 7:30 | CHF | PMI Manufacturing (MAR) | 48.3 (A) | 50.8 | Medium |
| 7:45 | EUR | Italian PMI Manufacturing (MAR) | 44.5 (A) | 45.8 | Low |
| 7:50 | EUR | French PMI Manufacturing (MAR F) | 44.0 (A) | 43.9 | Low |
| 7:55 | EUR | German PMI Manufacturing (MAR F) | 48.9 | 48.9 | Medium |
| 8:00 | EUR | Euro-Zone PMI Manufacturing (MAR F) | 46.6 | 46.6 | Medium |
| 8:00 | EUR | Italian Unemployment Rate s.a. (FEB P) | 11.8% | 11.7% | Low |
| 8:30 | GBP | PMI Manufacturing (MAR) | 48.8 | 47.9 | Medium |
| 8:30 | GBP | Net Consumer Credit (FEB) | 0.4B | 0.4B | Low |
| 8:30 | GBP | Net Lending Sec. on Dwellings (FEB) | 0.4B | 0.1B | Low |
| 8:30 | GBP | Mortgage Approvals (FEB) | 53.7K | 54.7K | Medium |
| 8:30 | GBP | M4 Money Supply (MoM) (FEB) | - | 0.9% | Low |
| 8:30 | GBP | M4 Money Supply (YoY) (FEB) | - | -0.8% | Low |
| 8:30 | GBP | M4 Ex IOFCs 3M Annualised (FEB) | 5.0% | 5.6% | Low |
| 9:00 | EUR | Euro-Zone Unemployment Rate (FEB) | 12.0% | 11.9% | Medium |
| 12:00 | EUR | German CPI (MoM) (MAR P) | 0.4% | 0.6% | High |
| 12:00 | EUR | German CPI (YoY) (MAR P) | 1.3% | 1.5% | High |
| 12:00 | EUR | German CPI - EU Harmonised (MoM) (MAR P) | 0.3% | 0.8% | Low |
| 12:00 | EUR | German CPI - EU Harmonised (YoY) (MAR P) | 1.7% | 1.8% | Low |
Critical Levels: