UK finance minister Sunak set to announce the budget today
The market is keeping in a calmer mood on the day with little change observed across major currencies, as the push and pull in risk sentiment continues to play out.
The ECB sought to fight back against higher yields yesterday but the Fed's Brainard and Daly were more sanguine about it, though Treasury yields retreated slightly.
As much as there is plenty of focus on Fedspeak and the bond market this week, I reckon Fed chair Powell's speech tomorrow will be the key risk event that the market will look towards for clues on how to wrap up the trading week.
US equities fell yesterday and closed nearer to the lows, failing to find much reprieve but futures are trading a touch higher today ahead of European trading.
Economic data won't matter all too much once again as the market continues to chop around alongside risk sentiment on the week thus far.
0730 GMT - Switzerland February CPI figures
Prior release can be found here. Swiss inflation is expected to keep more subdued, with core inflation estimated to hold at 0.0% y/y. There has been some improvements in recent months but nothing to suggest a shift in stance by the SNB.
0815 GMT - Spain February services, composite PMI
0845 GMT - Italy February services, composite PMI
0850 GMT - France February final services, composite PMI
0855 GMT - Germany February final services, composite PMI
0900 GMT - Eurozone February final services, composite PMI
The focus is on the final readings for France, Germany, and overall Eurozone. The final readings should just reaffirm that the euro area economy is facing some struggles in the services sector to start the year, amid tighter restrictions still ongoing. This adds to the likelihood that Q1 GDP will contract again but the drop may not be as bad as feared.
0930 GMT - UK February final services, composite PMI
The preliminary report can be found here. The final readings should just reaffirm some stabilisation in the UK services sector in February after the January slump. That said, conditions remain rather poor relative to the latter stages of last year as the lockdown played a key role in limiting economic activity overall.
1000 GMT - Eurozone January PPI figures
Prior release can be found here. A lagging and proxy indicator of inflation pressures in the euro area economy. A minor data point.
1200 GMT - US MBA mortgage applications w.e. 26 February
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week. Amid the sudden turn higher rates this year, recent mortgage activity has dipped with purchases falling sharply alongside refinancing activity so it'll be one to watch out for.
1230 GMT - UK finance minister Sunak announces the budget
Sunak already provided a bit of a spoiler earlier by saying that the furlough scheme will be extended to September. Adding to that, he is set to announce a £5 billion grant to help struggling retailers and hospitality firms and also an extra £1.65 billion to help the vaccine rollout across the UK. The budget is also likely to include a mortgage guarantee scheme, VAT and alcohol duty tax cuts for restaurants and pubs, extending the stamp duty holiday for homebuyers, and possibly vouchers for High Street shoppers. There is an outside chance of him announcing a corporate tax hike (from 19% to 25%) but that will be a bold step given current economic circumstances.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
