ECONOMIC DATA PICKS UP ON TUESDAY WITH EURO, US RELEASES
After a moderate start to the week, investors can expect a deluge of economic reports from both sides of the Atlantic on Tuesday.
Action picks up at 07:45 GMT with a report on French consumer confidence, followed immediately by Spanish inflation numbers for February. Beginning at 09:00 GMT, Italy will report on consumer and business confidence.
The European Commission’s statistical agency will also report a bevy of sentiment indicators at 10:00 GMT, including industrial confidence, economic sentiment, business climate, consumer confidence and service sentiment. The reports will be used to gauge the overall health of the euro area economy.
The most closely watched European data release will come at 13:00 GMT when Germany reports preliminary inflation numbers for the month of February. Germany’s harmonized index of consumer prices (HICP) is expected to slip to 1.3% year-over-year in February, down from 1.4% the month before. When measured monthly, the HICP is expected to rise 0.6% after falling 1% in January.
Multiple reports will headline the start of New York trading, including US wholesale inventories, goods trade balance and durable goods orders. The report on durable goods will be the most closely scrutinized. Orders for manufactured goods meant to last three years or more are expected to drop 2.2% in January after rising 2.8% in December. Excluding the volatile transportation category, orders are expected to rise 0.4%.
Investors can expect a pair of reports on US housing prices at 14:00 GMT. The S7P/Case-Shiller Home Price Indices are expected to rise 6.3% year-over-year in December. A separate housing price index report from the Federal Housing Finance Agency is forecast to show 0.4% growth in December.
Rounding out the data wire is the Richmond Fed Manufacturing Index, which is set for release at 15:00 GMT.
In terms of monetary policy, investors will be keen to monitor Jerome Powell’s first congressional testimony as Chairman of the Federal Reserve. The testimony will begin at 13:30 GMT.
Europe’s common currency strengthened on Monday, as the dollar drifted sideways ahead of a data-filled week. The EUR/USD reached a high of 1.2344, where it faced stiff resistance. The pair was last seen trading at 1.2325. The economic data could dictate the pair’s trajectory in the coming days.
Cable had a volatile start to the week, with prices climbing to 1.4062 before falling 100 pips to the 1.3960 region. The GBP/USD was last seen trading at those levels, with investors eyeing strong technical resistance in the 1.4050-1.4075 region.
The USD/CAD also fluctuated on Monday. After an initial drop, the pair quickly regained its poise to settle in the 1.2680 region. The pair faces immediate resistance at the 1.2723 level, which represents the high from 23 February.