We all know it is going to be bad, but just how bad?
That said, the market mood has completely turned on its head after the Fed announcement yesterday where they unveiled an unprecedented package to provide a backstop for the US economy, effectively trying to address any potential credit risks that may arise.
The dollar has seen a mixed reaction since and it looks like gold is now starting to come out of the shadows and into the spotlight instead. US stocks ended the day poorly still but the mood today is more optimistic with Asian equities soaring alongside US futures.
The greenback sold off initially before recouping losses but is trading lower once again today with the market feeling more confident as US lawmakers are also said to be close to agreeing on the stimulus package; following two failed votes over the last two days.
The PMI data across Europe later will give us a sense of how economic sentiment is over the past week or so but for now, central bank/government and coronavirus headlines are still the number one priority in the market as we gather the post-Fed reaction.
0815 GMT - France March flash manufacturing, services, composite PMI
0830 GMT - Germany March flash manufacturing, services, composite PMI
0900 GMT - Eurozone March flash manufacturing, services, composite PMI
The expectation is for sharp falls in the releases today with the services sector to take a heavy hit amid the shutdowns and lack of foreign travel across the globe. You can pretty much ignore the manufacturing headline reading, as output is also expected to decline sharply but this will be offset by heavy disruptions in the supply chain (which is calculated inversely when fed to the headline). As such, the details matter more for manufacturing but services is expected to exhibit an unprecedented decline as we have seen elsewhere too. The only question is, how bad is bad?
0930 GMT - UK March flash manufacturing, services, composite PMI
Prior releases can be found here (manufacturing) and here (services, composite). Unlike the euro area releases, the drop in the UK prints aren't expected to be as drastic because of the not-so-impactful shutdown. But still, things are expected to reflect more pessimism as services will be dampened by a slowdown in travel activity among other things. As for manufacturing, output should also suffer while supply chain disruptions will be evident as well.
1100 GMT - UK March CBI trends total orders, selling prices
Prior release can be found here. The CBI readings are a survey on manufacturers to rate the level of volume for orders expected during the next 3 months.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading!
