[b]EURUSD H1: Technical and Fundamental Analysis and Forecasting
EURUSD H1: Technical and Fundamental Analysis and Forecastings
The Bank of Canada (BoC) are centre stage on Wednesday at 2:45 pm GMT and are anticipated to stand firm at 5.0% this week (marking a fifth consecutive session on hold at a 22-year high). Year-over-year headline inflation cooled to 2.9% in January (down from the 3.4% jump in December), marking its lowest rate since June of 2023.
This coupled with economic activity increasing by 1.0% on an annualised basis for Q4 2023, suggests policymakers are unlikely to move on rates at this week’s meeting. Investors are betting the first 25bp rate cut will not be seen until July’s policy meeting (34bps of easing priced in), which is largely in line with market forecasts for the Fed and the European Central Bank (ECB).
The ECB will claim the central bank’s spotlight this week on Thursday at 1:15 pm GMT and is widely expected to remain on hold for all key benchmark rates for a fourth consecutive meeting. Following regional inflation numbers from France, Spain and Germany, the latest inflation data out of the euro area on Friday revealed that headline inflation slowed to 2.6% in the twelve months to February from 2.6% in January, according to the latest flash estimate from Eurostat.
Core inflation also cooled from 3.3% in January to 3.1% in February. Though we continue to see a disinflationary process play out (albeit February’s softer inflation was largely fuelled by base effects), this and accompanying data since the last meeting in late January are unlikely sufficient to prompt a cut at this week’s meeting or either April’s meeting.
As of writing, the OIS curve forecasts 74bps of easing for the year (you may recall that we have seen a significant hawkish repricing recently from around 150bps of easing priced in for the year) with the first 25bp cut expected in June (well -24bps). What will be widely watched this week are the new Staff Projections (released four times per year) on growth and inflation—both of which are expected to be revised lower in 2024, and, of course, the ECB President Christine Lagarde’s comments at the presser 30 minutes after the rate announcement. Should downside revisions come to fruition, Europe’s single currency could come under pressure.
Friday’s calendar also entertains the US Employment Situation Report at 1:30 pm GMT. According to Bloomberg’s current poll, the median estimate suggests 190,000 new jobs will be added to the US economy in February (the current high/low estimate is between 225,000 and 130,000). Unemployment is expected to remain at 3.7% in February with a narrow estimate range between 3.8% and 3.7%. For wages, average hourly earnings, expectations are for wages to have slowed from 0.6% to 0.2% between January and February, with year-over-year data also expected to slow to 4.3% from 4.5% prior (estimate range between 4.5% and 4.1%).
What will also be on the radar for many market participants this week is the US ISM Services print on Tuesday at 3:00 pm GMT, Aussie quarterly GDP data at 12:30 am GMT, US ADP Non-Farm Employment numbers at 1:15 pm GMT and JOLTs data at 3:00 pm GMT. Additionally, on the watchlist for many this week will be the Federal Reserve Chair Jerome Powell testifying before Congress on 7 March and, of course, the UK Spring Budget on 6 March.
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The Bank of Canada (BoC) are centre stage on Wednesday at 2:45 pm GMT and are anticipated to stand firm at 5.0% this week (marking a fifth consecutive session on hold at a 22-year high). Year-over-year headline inflation cooled to 2.9% in January (down from the 3.4% jump in December), marking its lowest rate since June of 2023.
This coupled with economic activity increasing by 1.0% on an annualised basis for Q4 2023, suggests policymakers are unlikely to move on rates at this week’s meeting. Investors are betting the first 25bp rate cut will not be seen until July’s policy meeting (34bps of easing priced in), which is largely in line with market forecasts for the Fed and the European Central Bank (ECB).
The ECB will claim the central bank’s spotlight this week on Thursday at 1:15 pm GMT and is widely expected to remain on hold for all key benchmark rates for a fourth consecutive meeting. Following regional inflation numbers from France, Spain and Germany, the latest inflation data out of the euro area on Friday revealed that headline inflation slowed to 2.6% in the twelve months to February from 2.6% in January, according to the latest flash estimate from Eurostat.
Core inflation also cooled from 3.3% in January to 3.1% in February. Though we continue to see a disinflationary process play out (albeit February’s softer inflation was largely fuelled by base effects), this and accompanying data since the last meeting in late January are unlikely sufficient to prompt a cut at this week’s meeting or either April’s meeting.
As of writing, the OIS curve forecasts 74bps of easing for the year (you may recall that we have seen a significant hawkish repricing recently from around 150bps of easing priced in for the year) with the first 25bp cut expected in June (well -24bps). What will be widely watched this week are the new Staff Projections (released four times per year) on growth and inflation—both of which are expected to be revised lower in 2024, and, of course, the ECB President Christine Lagarde’s comments at the presser 30 minutes after the rate announcement. Should downside revisions come to fruition, Europe’s single currency could come under pressure.
Friday’s calendar also entertains the US Employment Situation Report at 1:30 pm GMT. According to Bloomberg’s current poll, the median estimate suggests 190,000 new jobs will be added to the US economy in February (the current high/low estimate is between 225,000 and 130,000). Unemployment is expected to remain at 3.7% in February with a narrow estimate range between 3.8% and 3.7%. For wages, average hourly earnings, expectations are for wages to have slowed from 0.6% to 0.2% between January and February, with year-over-year data also expected to slow to 4.3% from 4.5% prior (estimate range between 4.5% and 4.1%).
What will also be on the radar for many market participants this week is the US ISM Services print on Tuesday at 3:00 pm GMT, Aussie quarterly GDP data at 12:30 am GMT, US ADP Non-Farm Employment numbers at 1:15 pm GMT and JOLTs data at 3:00 pm GMT. Additionally, on the watchlist for many this week will be the Federal Reserve Chair Jerome Powell testifying before Congress on 7 March and, of course, the UK Spring Budget on 6 March.
NOTE : 📬 COMMENT, ✅LIKE AND ☑️ FOLLOW. THIS CAN HELP ME TO ANALYSE THE MARKET MORE EFFICIENTLY FOR YOU.