The US February ISM rose to 49.5

2 March, 2016

The US February ISM rose to 49.5

FX News Today

Swiss growth much better than expected at +0.4% q/q, up from -0.1% in Q3 (revised down from 0.0%). The median forecast had been for a 0.2% rise. The y/y figure was also +0.4%, down from 0.8% in Q3 but above the 0.1% median forecast. The jump in the franc in January 2015 following the SNB’s abandonment of its former cap, along with sluggishness in the Eurozone economy have been dragging on the Swiss economy, though the year finished well with the 0.4% growth the best quarterly performance of 2015.

ECB’s Draghi brandished his dovish bazooka again, noting that the bank’s policy review in March will be seen against the background of increased downside risks to the prior outlook and there “are no limits” to how far we are willing to deploy our instruments within our mandate to achieve our objective of inflation rates below but close to 2% over the medium-term. Moreover, Euro area inflation dynamics continue to be weaker than expected. Speaking from Frankfurt, Draghi continues to keep expectations high for action in March, which helped relegate the already weak euro to session lows after being weighed firmer rounds of US data earlier.

The US February ISM rose to 49.5 (median 48.5) from 48.2 in January while US construction spending grew by 1.5% (median 0.5%) in January following a 0.6% (was 0.1%) pace in December and US Markit manufacturing PMI slid to 51.3 in the final February print, from 52.4 in January, though it improved slightly versus the 51.0 flash February reading. This just beats the all-time low of 51.2 set in December.

Canada’s real GDP grew 0.8% in Q4, contrary to expectations (median flat) following the revised 2.4% bounce in Q3 (was +2.3%, q/q saar). The separate December GDP tally showed a 0.2% gain (m/m, sa) that topped expectations (median +0.1%) after the 0.3% bounce in November. The BoC expected a flat reading for real Q4 GDP, so these reports further trim the chances for a near term rate cut from the bank. Note, however that trade made a sizable contribution to growth as exports fell by less than imports, consumption slowed and business investment contracted. So at first glance the dynamics of the Q4 report appear to be roughly in-line with bank projections. Yet these are better than anticipated reports overall, notably the December GDP gain that shows the economy with some momentum going into 2016.

Main Macro Events Today

Euro Area PPI: The Euro Area Producer Price Index (Y/Y) for January is released today and is expected to come in almost unchanged at -2.9%. December reading was -3.0%. This should put ammunition in the hands of the doves in the ECB.

US ADP Employment Change: The ADP unemployment survey for February is due today with an expectation of 195K new jobs against the previous number of 205K.

US Fed Beige Book: Traders look forward to this month’s Beige Book release as it is used by the FOMC to help in their interest rate decisions. In the previous release, the Philadelphia Fed stated that the economy was expanding moderately while consumer spending remained mixed.


Source link  
FTSE 100 futures are slightly higher

Asian stock markets are narrowly mixed and fluctuating at high levels, as trading volumes are low and investors await the Fed decision...

Markets have come quite a way up

Both central banks are widely expected to keep policy on hold, but the BoE’s statement in particular will be watched carefully...

Dollar traded softer vs many currencies

European Outlook: Asian stock markets mostly moved higher in quiet trade, after Wall Street managed to close with slight gains...


Oil prices are holding above USD 49

Yesterday there was a relatively dovish view from the nonvoting president, Fed Bullard, who continues to twist between a hawkish...

Dollar majors playing narrow ranges

EUR-USD held in the upper 1.18s, below the 31-month high logged midweek at 1.1910, and Cable settled in the mid 1.31s, consolidating the sharp losses...

UK100 is at 0.62% gain for the day

UK preliminary Q2 GDP came on the nose at 0.3% q/q and 1.7% y/y, up from Q1’s 0.2% in the case of the q/q figure and down from Q1’s 2.0% y/y...


The economic week ahead

Both the ECB and BoJ met expectations as each left policy unchanged last week, though the outlook for ECB remains under the dark cloud of future QE tapering...

UK consumer finally falters EURGBP to rise

One year on from Brexit and I was wrong about a recession in the UK by the end of 2016. A little overreaction in my immediate...

ASX tanked yesterday, oil bounced back

May existing home sales bounce to a 5.62 mln rate trimmed the April drop to 5.56 mln from a 5.70 mln cycle-high in March...

  


Share: