EURUSD is heading down again. The current quote is 1.0660. Yesterday investors were busy analysing the PMI of the EU and the US, but the attitude of the Federal Reserve System remained in the focus of attention. The closer we come to the publication of the minutes of the last meeting, which is scheduled on today’s evening, the more nervous the market becomes. The prelim PMI in European services in February grew to 53 points from 50.8 points previously. This is great news. In production, the PMI has dropped to 48.5 points from 48.8 earlier. Seems that it inflation to blame here. The ZEW business sentiment index in February in the euro zone leaped up to 29.7 points from 16.7 points. As for Germany, it amounted to 28.1 points from 16.9 points.
What could possibly make business so happy? It might be quite a warm winter that got people rid of all worries about growing prices on energy carriers. The US Markit PMI in services in February grew to 50.5 points from 46.8 points. In production, it rose to 47.8 points from 46.9 points earlier.
Quite interestingly, consumers respond to the relative stabilisation of the economy faster than production does. Today all eyes are focused on the Fed’s minutes. We should not look for anything which is not there, but volatility in the second half of the day will be excessive.
