- German prelim February retail sales -0.2% m/m, -5.3% y/y. Weaker than expected (vs median forecasts of +0.2% and -1.4% respectively)
- Spanish PM: Bank of Spain developing bank intervention protocol
- Euro zone manufacturing PMI for March (final) 33.9 (vs flash estimate/median forecast of 34.0)
- UK CIPS/Markit manufacturing PMI for March 39.1 (vs 34.9 in February and some way above median forecast of 35.0) Gives sterling a lift
- Euro zone unemployment for February rose to 8.5% (vs upwardly revised 8.3% in January and median forecast of 8.3%)
Generally a very slow morning with EUR/USD, USD/JPY and USD/CHF hardly changed. The one bright spark as far as activity is concerned has been cable and the sterling crosses.
Cable was already moving higher (around 1,4370) when the release of much better than expected UK manufacturing PMI sent the pairing to a 1.4408 session high before steadying, presently at 1.4385.
Cable was helped in no small way by a fairly aggressive sell-off in EUR/GBP with a “Dutch bank” reportedly a particularly big player in the move lower. Obviously tomorrows ECB meet, and a probable rate cut and possible announcment of quatitative ease, is something which hangs over the euro at present.
Sterling has also been helped by a successful gilt auction. Sale of 2015 gilts attracted 2.23 times as much in bids as the £3.5 bln worth of securities on offer.
Also some talk of a HSBC rights issue this Friday. Some talk sterling been bought for that.
Some general caution evident ahead of ECB meet/ G20 summit.
