EUR: EURGBP extends losses
Mar-30 07:09
- Again a subdued reaction in EURUSD, still stuck in a 24 pips range and the pair actually gained on the Spanish CPI miss, but more a function of the USD selling, following the jump in Estoxx.
- EURGBP extends losses and now eye 0.87712 as the next support area.
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EUROPEAN DATA: Inflation in focus
Feb-28 07:08
- Flash inflation data for February is in focus this morning with French inflation data due at 7:45GMT / 8:45CET and Spanish data due at 8:00GMT / 9:00CET. These data come ahead of German state / national prints tomorrow and the Italian / Eurozone prints on Thursday.
- These data will be crucial for the ECB's communication at its March meeting. The bar to anything other than a 50bp hike in March is huge at this stage, but the communication surrounding future meetings is still going to be very data driven, with inflation data being the most important datapoint in Europe in coming months.
- As we have already noted in previous bullets this morning, market pricing is now consistent with a 50bp hike in March and then one 50bp and two 25bp in the May/June/July meetings and then roughly a 50% probability of a further hike in September or later.
- This morning's data brings two way risks to this pricing but we also note that as this is flash data we don't get huge amounts of detail in the breakdown. For the French data we don't receive a core print, while for the Spanish data the only core inflation print we receive is of the national CPI, not the HICP, which can sometimes be different.
- All will be closely watched, however, and likely set the day for the tone for the European trading session.
SWEDEN: Disappointing GDP data, but little impact for Riksbank policy
Feb-28 07:04
- Looks like there are downward revisions to Q3 Q/Q GDP in Sweden which make that -0.9%Q/Q print look even worse than at first glance.
- EURSEK is back to where it was 20 minutes before the data. The market cares a lot more about inflation than activity data at the moment and this data is a bit too backwards looking to really have a big impact on Riksbank policy.
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Feb-28 07:01
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