Daily and Weekly News Update by LQDFX

[Daniel LQDFX]

Daily News Update​

​

22 March 2024​

Friday​

Scheduled for release this Friday, key economic indicators from Great Britain, Germany, and Canada are set to be announced, drawing significant attention from investors and market analysts alike. Great Britain is poised to unveil its month-over-month Retail Sales figures, a critical measure of consumer spending and economic health. Meanwhile, Germany is expected to announce its Ifo Business Climate Index, providing insights into the business sentiment within Europe's largest economy. In addition, Canada will release its Core Retail Sales and Retail Sales data on a month-over-month basis, offering a glimpse into the Canadian consumer behavior and retail performance. These announcements are highly anticipated as they provide valuable indicators of the economic vitality in each of these major economies.​

GBP - Retail Sales m/m​

The monthly report on changes in inflation-adjusted retail sales, typically released approximately 20 days after the end of each month, serves as the primary indicator of consumer spending trends. This metric, also known as Sales Volume or All Retailers Sales, plays a crucial role in assessing the overall economic activity, with consumer spending being a dominant component.

In January 2024, retail sales volumes experienced a notable rebound of 3.4%, marking the most significant monthly increase since April 2021, following a record decline of 3.3% in December 2023 (revised from 3.2%). This resurgence brought volumes back to levels last seen in November 2023. With the exception of clothing stores, sales volumes across all subsectors showed growth, with food stores, particularly supermarkets, contributing significantly to the upturn. Despite this positive monthly performance, sales volumes recorded a marginal decrease of 0.2% in the three months leading up to January compared to the preceding three months, marking the smallest decline since August 2023.

TL;DR

• Retail sales volumes surged by 3.4% in January 2024, the highest monthly rise since April 2021, offsetting December 2023's 3.3% drop.
  
• Sales in January returned to November 2023 levels, with growth in all sectors except clothing.
  
• Despite January's rebound, there was a slight 0.2% decrease in sales volumes over the past three months, the smallest dip since August 2023.
  

The Retail Sales m/m forecast stands at 0.3%, down from the previous figure of 3.4%.

The upcoming Retail Sales m/m is scheduled for release this Friday at 7:00 AM GMT.

The last time, British Retail Sales m/m data was announced on the 16th of February, 2024. You may find the market reaction chart (GBPJPY M5) below:

EUR - German ifo Business Climate​

The German Ifo Business Climate Index is a highly regarded monthly gauge of the economic climate in Germany, derived from a comprehensive survey of around 9,000 businesses in sectors such as manufacturing, construction, wholesale, retail, and services. The survey assesses current business conditions and anticipates economic activities for the next six months, making it a leading indicator of the country's economic health. Changes in the index are closely monitored by traders and investors as they provide early insights into potential shifts in economic activities like spending, hiring, and investment. Notably, the index has undergone revisions, including an update to its base year from 2000 to 2005 in May 2011, and an expansion to include the services sector in April 2018, enhancing its accuracy and relevance in reflecting the broader economic landscape.

In February 2024, Germany's Ifo Business Climate Index saw a marginal increase, reaching 85.5, a slight improvement from the 85.2 recorded in January, which was the lowest in over three years. This figure met the expectations of analysts, indicating a stabilization in the business outlook. Companies expressed a somewhat more positive outlook for the future, with the expectations index nudging up to 84.1 from 83.5. However, the assessment of the current business environment remained subdued, staying at 86.9, the lowest point since July 2020. A closer look at the sectors reveals a mixed sentiment; the service sector and construction industry experienced a slight uplift in confidence, whereas manufacturers and traders reported a decline in sentiment, reflecting varied challenges across the economy.

TL;DR

Metric	February 2024	January 2024	Previous Record	Notes
Ifo Business Climate Index	85.5	85.2	Lowest in >3 years in Jan	Marginal increase indicating stabilization
Expectations Index	84.1	83.5	-	Improved outlook for the future
Current Business Environment	86.9	86.9	Lowest since July 2020	Remained subdued
Sector Sentiment	Mixed	Mixed	-	Service and construction up, manufacturing and trading down

The latest forecast for the German Ifo Business Climate Index suggests a slight uptick to 86, from the previous reading of 85.5.

The upcoming German ifo Business Climate is scheduled for release on Friday at 9:00 AM GMT.

CAD - Core Retail Sales m/m​

Core Retail Sales, measured on a monthly basis and released approximately 50 days following the end of each month, represent the change in the total value of retail sales excluding automobile sales. Given that automobile transactions comprise about 20% of total retail sales and are subject to significant fluctuations, they can obscure the true trend in consumer spending. As a result, the Core Retail Sales figure is considered a more reliable indicator of underlying spending patterns, providing valuable insights into consumer behavior and economic health without the distortion caused by the volatile automobile sector.

In December, Canada's Retail Sales excluding automobiles saw a notable rise to 0.6 %, marking a recovery from the -0.4 % dip observed in November 2023. Historical data from 1991 to 2023 shows that this segment has averaged a growth rate of 0.38 %. The peak of this trend was witnessed in June 2020, with an unprecedented surge to 14.1 %, contrasting sharply with a record decline of -18.8 % in April 2020, highlighting the volatile nature of retail sales in the face of varying economic conditions.

TL;DR

• Canada's Retail Sales excluding automobiles rose to 0.6% in December, recovering from a -0.4% drop in November 2023.
  
• Historically, this segment has averaged a 0.38% growth rate from 1991 to 2023.
  
• The peak growth was 14.1% in June 2020, while the lowest was -18.8% in April 2020, highlighting significant volatility.
  

The Core Retail Sales m/m is indicating a 0% change, compared to the prior result of 0.6%.

CAD - Retail Sales m/m​

Retail Sales, reported monthly approximately 50 days after each month concludes, track the change in the total value of sales at the retail level. This metric is of paramount importance to traders as it serves as the primary indicator of consumer spending, which constitutes the majority of overall economic activity.

In January 2024, preliminary estimates indicated a slight downturn in Canada's retail sector, with sales reportedly decreasing by 0.4% month-over-month. This followed a positive surge in December, where retail sales climbed by 0.9%, a revision from an initial estimate of 0.7%, marking a rebound after a stagnant November. The boost in December was primarily driven by a notable 1.9% increase in sales within the motor vehicle and parts dealers sector, continuing a four-month upward trend, spearheaded by a 2.4% rise in new car dealer sales. Additionally, gasoline stations and fuel vendors experienced a 0.9% uptick in sales. Conversely, there was a 2.7% decline in sales from automotive parts, accessories, and tire retailers. Excluding these automotive and fuel segments, core retail sales saw a modest 0.5% increase, with significant contributions from general merchandise retailers, which surged by 2.8%, and food and beverage retailers, with a 1.5% rise. The positive momentum in retail sales was predominantly observed in eight provinces, with Ontario leading at a 1.3% increase, closely followed by British Columbia, which saw a 1.5% rise.

TL;DR

• January 2024 saw a 0.4% month-over-month decrease in Canada's retail sales, following a revised 0.9% increase in December.
  
• December's growth was led by a 1.9% rise in motor vehicle and parts dealers' sales, including a 2.4% increase in new car sales.
  
• Gasoline stations and fuel vendors experienced a 0.9% sales increase, while automotive parts, accessories, and tire retailers saw a 2.7% decline.
  
• Core retail sales (excluding automotive and fuel) increased by 0.5% in December, driven by general merchandise (2.8%) and food and beverage retailers (1.5%).
  
• Retail sales growth in December was positive in eight provinces, with Ontario and British Columbia seeing rises of 1.3% and 1.5%, respectively.
  

The forecast for Retail Sales m/m is indicating 0.1% compared to the previous 0.9% outcome.

The upcoming Core Retail Sales m/m & Retail Sales m/m data will be published this Friday at 12:30 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

Daily News Update​

​

25 March 2024​

Monday​

The release of New Home Sales data in the United States and the Westpac Consumer Confidence Index from Australia on Monday is set to provide valuable insights into the economic health of both nations. These indicators are crucial as they can trigger widespread economic activities. This encompasses the subsequent buying of furniture and appliances, the processing of mortgage transactions by financial institutions, and the remuneration of brokers involved in facilitating these deals.​

USD - New Home Sales​

The Annualized New Home Sales metric, which quantifies the monthly sales of new single-family homes on an annualized basis, is disclosed monthly on the 17th business day following the month's conclusion. This indicator is of significant interest to traders as it serves as a leading gauge of economic vitality. The sale of a new home initiates a comprehensive economic impact, encompassing the purchase of furnishings and appliances, the issuance of a mortgage by a financial institution, and the remuneration of brokers involved in facilitating the sale, thereby underlining its importance in assessing economic health.

On February 26, 2024, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that new residential sales in January 2024 reached a seasonally adjusted annual rate of 661,000 units, marking a 1.5 percent increase from the revised December rate of 651,000 and a 1.8 percent rise from January 2023's estimate of 649,000. The median sales price of new houses sold was $420,700, with the average sales price at $534,300. The seasonally adjusted estimate of new houses available for sale at the end of January stood at 456,000, equating to an 8.3-month supply at the current sales rate. Additionally, it was announced that beginning with the April 2024 release, new residential sales data would undergo revisions to better reflect current new home price distributions and include new price groupings, with re-calculated data from January 2020 to March 2024 and archived data from 2002 to 2019.

TL;DR

• January 2024 new residential sales at 661,000 units, up 1.5% from December and 1.8% from last January.
  
• Median new house price at $420,700, average at $534,300.
  
• 456,000 new houses available, equating to an 8.3-month supply.
  
• Data revisions starting April 2024, affecting January 2020 to March 2024 and archiving 2002-2019 data.
  

The New Home Sales forecast suggests 673,000, up from the previous figure of 661,000.

The upcoming release of New Home Sales data is scheduled for Monday at 2:00 PM GMT.

AUD - Westpac Consumer Confidence Index​

The Westpac Consumer Sentiment index, a monthly diffusion index released typically on the second Tuesday, gauges changes in consumer outlook based on a survey of approximately 1,200 individuals. Participants assess past and future economic conditions, employment prospects, and the climate for significant purchases. While its impact on markets is generally mild, fluctuations can occur due to data volatility. Traders monitor this index closely as it serves as a leading indicator of consumer spending, which constitutes a significant portion of overall economic activity.

In January, Australia witnessed a downturn in business conditions with a slight uptick in confidence, as highlighted by a National Australia Bank Ltd. survey. Contrasting this, consumer sentiment surged by 6.2%, as per Westpac Banking Corp.'s report, fueled by the cessation of the Reserve Bank's interest rate hikes and anticipated tax cuts. This shift, showcasing a divergence between business and consumer outlooks, reverses previous trends where rate increases dampened consumer confidence but businesses remained relatively unaffected. The Reserve Bank of Australia's significant rate hikes since May 2022, aimed at controlling inflation, have been a key factor in this dynamic. With borrowing costs held at a 12-year peak and the expectation of a downward adjustment in rates, there's a growing optimism for a relaxation in price pressures and an improvement in economic conditions by early 2024.

TL;DR

The anticipated figure for the Westpac Consumer Confidence Index shows a decline of 1.6%, in contrast to the prior result of a 6.2% increase.

The upcoming release of the Westpac Consumer Confidence Index is set for Monday at 11:30 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

Daily News Update​

​

26 March 2024​

Tuesday​

On Tuesday, Germany and the United States are set to publish a series of important economic updates. Germany will announce its GfK Consumer Confidence, while the US will release its Core Durable Goods Orders month-over-month, Durable Goods Orders month-over-month, and S&P/CS Composite-20 HPI year-over-year. The day will also feature the much-awaited CB Consumer Confidence report from the US, wrapping up with the Richmond Manufacturing Index.​

EUR - Gfk Consumer Confidence​

The German GfK Consumer Climate Index, a monthly composite measure released towards the end of each month, assesses consumer sentiment based on surveys of approximately 2,000 individuals. This index evaluates perceptions of past and anticipated economic conditions, personal financial circumstances, and the climate for significant purchases. Values above 0 denote consumer optimism, while those below signify pessimism. Traders closely monitor this index as it serves as a leading indicator of consumer spending, which plays a pivotal role in the broader economic activity.

In February, Germany's consumer sentiment saw a marginal recovery after a notable decline the previous month, as reported by the GfK Consumer Climate powered by NIM study. The slight uptick to -29 points in the forecast for March is primarily due to increased income expectations, despite a continued lack of improvement in buying willingness and economic outlook. The survey highlights a significant rise in the propensity to save, reaching levels not seen since the 2008 financial crisis, indicating ongoing consumer caution amidst rising prices and dim economic forecasts. With income optimism bolstered by wage and pension increases against a backdrop of falling inflation rates, the stagnation in purchasing willingness underscores a pervasive uncertainty among consumers, dampening the prospects for a swift rebound in consumer spending.

TL;DR

The Gfk Consumer Confidence is projected to improve slightly to -27.8 from the previous figure of -29.

The upcoming release of the GfK Consumer Confidence report is scheduled for Tuesday at 7:00 AM GMT.

USD - Core Durable Goods Orders m/m​

The Core Durable Goods Orders report, published monthly approximately 26 days following the month's end, reflects the change in the total value of new orders for long-lasting manufactured goods, excluding transportation-related items. This data, subject to revisions in the subsequent Factory Orders report about a week later, offers a more reliable insight into purchasing trends by excluding the often volatile aircraft orders. Traders value this report as a leading indicator of manufacturing activity, with rising orders suggesting an uptick in production to meet the demand.

In January, Core Durable Goods Orders in the US, excluding transportation items, had experienced a modest decline of 0.3%, as disclosed by the Census Bureau on Tuesday. This minor drop occurred against the backdrop of a more significant decrease in overall Durable Goods Orders, which fell by 6.1% to $276.7 billion, exceeding the expected 4.5% contraction. The report also highlighted a more pronounced decrease in orders excluding defense, which plummeted by 7.3%. Despite the downturn in broader durable goods orders, the relatively stable core figures indicated a nuanced economic situation. Following the release of this mixed data, the US Dollar Index remained subdued, staying below the 104.00 mark.

TL;DR

The Core Durable Goods Orders forecast suggests a modest increase of 0.3%, contrasting with the previous decline of -0.3%.

The upcoming release of the Core Durable Goods Orders m/m is scheduled for Tuesday at 12:30 PM GMT.

USD - Durable Goods Orders m/m​

The Durable Goods Orders report, issued monthly approximately 26 days after the close of each month, tracks the variation in the total value of new orders for durable goods placed with manufacturers. Durable goods are categorized as hard products expected to last more than three years, including automobiles, computers, appliances, and airplanes. This initial data is typically revised in the subsequent Factory Orders report, released roughly a week later. Traders pay close attention to this report as it serves as a leading production indicator, where an increase in orders suggests a forthcoming rise in manufacturing activity to fulfill these orders.

In the first month of 2024, the US experienced a notable 6.1% decrease in orders for manufactured durable goods on a month-over-month basis, significantly exceeding the anticipated 4.9% downturn and coming off a 0.3% drop in December. This represented the most pronounced decline in such orders since April 2020, primarily due to a sharp decrease in transportation equipment demand, which fell by 16.2% owing to a stark 58.9% reduction in nondefense aircraft and parts and a marginal 0.4% decline in motor vehicles and parts. Furthermore, there were decreases in orders for fabricated metal products (0.9%), primary metals (1.7%), and capital goods (15%). Excluding transportation, there was a minor decrease of 0.3% in new orders, and excluding defense, orders plummeted by 7.3%. Nonetheless, there was a small uptick of 0.1% in orders for non-defense capital goods excluding aircraft, a critical measure of business investment, which contrasted with a 0.6% fall in December, presenting a nuanced view of business investment trends.

TL;DR

-6.2The projected forecast for Durable Goods Orders m/m suggests a 1% increase compared to the previous -6.1%.

The next Durable Goods Orders m/m release is set for Tuesday at 12:30 PM GMT.

USD - S&P/CS Composite-20 HPI y/y​

The S&P CoreLogic Case-Shiller Indices report, disseminated monthly approximately 60 days following the month's conclusion, evaluates the variation in the selling prices of single-family homes across 20 metropolitan areas. Notably, this report is among the few that are not seasonally adjusted, serving as the principal metric for this indicator. Traders regard this data as a vital leading indicator of the housing industry's vitality, with escalating house prices enticing investors and stimulating sectoral activity.

In December 2023, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index revealed a 5.5% annual gain, marking an increase from the previous month's 5.0%. Both the 10-City and 20-City Composites also saw rises, with increases of 7.0% and 6.1% year-over-year, respectively. Among the 20 cities, San Diego led with an 8.8% gain, followed by Los Angeles and Detroit at 8.3% each. However, Portland exhibited the smallest year-over-year growth at 0.3%. On a monthly basis, the U.S. National Index experienced a 0.4% decrease, while both the 20-City and 10-City Composites saw decreases of 0.3% and 0.2%, respectively. After seasonal adjustment, all indices posted 0.2% increases. Brian D. Luke of S&P Dow Jones Indices noted the housing sector's resilience amidst challenges in the fourth quarter, with record highs sustained for seven consecutive months in 2023. Despite not reaching the double-digit gains of previous years, the housing market showed consistent growth above trend, indicating a potential shift in post-pandemic homeownership dynamics. Increased mortgage rates were cited as a factor influencing declines in home prices in the fourth quarter, with 15 markets experiencing lower values compared to September.

TL;DR

• U.S. National Home Price Index rose 5.5% annually, up from last month's 5.0%.
  
• 10-City Composite increased by 7.0% and 20-City Composite by 6.1% year-over-year.
  
• San Diego led with an 8.8% gain; Los Angeles and Detroit both at 8.3%.
  
• Portland had the smallest growth at 0.3% year-over-year.
  
• Monthly: National Index down 0.4%, 20-City Composite down 0.3%, 10-City down 0.2%.
  
• After adjustment, all indices saw a 0.2% monthly increase.
  
• Housing sector resilience noted, with consistent growth above trend.
  
• Increased mortgage rates influenced Q4 price declines; 15 markets saw lower values compared to September.
  

The S&P/CS Composite-20 HPI y/y forecast shows an increase to 6.5%, up from the previous 6.1%.

The upcoming release of the S&P/CS Composite-20 HPI y/y is scheduled for Tuesday at 1:00 PM GMT.

USD - CB Consumer Confidence​

The CB Consumer Confidence Index, a composite measure derived from surveys of approximately 3,000 households, is released monthly on the last Tuesday of the current month. It assesses households' perceptions of current and future economic conditions, including labor market dynamics, business climates, and the overall economic environment. Traders monitor this index closely, as it acts as a leading indicator of consumer spending, which significantly influences the broader economic landscape.

In February, The Conference Board's consumer survey revealed a decline in American consumer confidence to 106.7, down from 110.9 in January, ending a three-month trend of positive sentiment towards the economy. This shift in attitude was attributed to growing concerns about the job market, despite reduced worries over inflation, particularly food and gas prices. The survey highlighted that the drop in confidence was widespread across most income and age groups, with notable exceptions. Furthermore, the economic outlook for the coming months has worsened, with expectations for income and business conditions falling to levels often associated with a looming recession. Inflation expectations also decreased to 5.2%, a significant drop from the mid-2022 peak of 7.9%. Despite this, the US economy continues to show resilience with strong indicators such as a 3.3% annualized growth rate in the last quarter and a robust job market. However, challenges remain, including high interest rates and low housing affordability, contributing to the complex economic landscape.

TL;DR

• Consumer confidence fell to 106.7 in February from 110.9 in January.
  
• The decline ends a three-month trend of increasing economic optimism.
  
• Concerns about the job market grew, offsetting reduced inflation worries.
  
• Confidence dropped across most income and age groups, with few exceptions.
  
• Economic outlook for upcoming months has worsened, signaling possible recession.
  
• Expectations for income and business conditions declined.
  
• Inflation expectations dropped to 5.2% from mid-2022's peak of 7.9%.
  
• Despite the dip in confidence, the US economy showed a 3.3% growth rate last quarter and a strong job market.
  
• Challenges include high interest rates and low housing affordability.
  

The projected forecast for CB Consumer Confidence remains unchanged at 106.7, matching the previous outcome, signaling no change in consumer’s trust in the market.

The upcoming CB Consumer Confidence is set to take place on Tuesday at 2:00 PM GMT.

The last time, US CB Consumer Confidence was announced on the 27th of February, 2024. You may find the market reaction chart (EURUSD M5) below:

USD - Richmond Manufacturing Index​

The Richmond Manufacturing Index, a composite gauge derived from a survey of approximately 55 manufacturers in the Richmond area, is issued monthly on the fourth Tuesday of each month. It evaluates business conditions, including shipments, new orders, and employment, with values above 0 signaling improving conditions and those below 0 indicating deterioration. The index's impact is often subdued due to the availability of earlier regional manufacturing indicators.

In February, manufacturing activity in the Fifth District stabilized, as reported by the Federal Reserve Bank of Richmond. The composite manufacturing index saw a modest recovery, moving up from -15 in January to -5. Despite this improvement, shipments continued to struggle at -15, although new orders and employment showed notable gains, rising to -5 and 7, respectively. Businesses expressed a slight increase in optimism regarding local conditions, with future expectations also ticking upwards. However, issues like declining backlogs persisted, even as some indicators like vendor lead times and capacity utilization showed signs of recovery. Price growth rates for both inputs and outputs moderated, with firms anticipating a continued easing in the coming year.

TL;DR

• Fifth District's manufacturing activity stabilized in February, with the index improving from -15 to -5.
  
• Shipments index remained low at -15, while new orders and employment indices improved to -5 and 7, respectively.
  
• Slight increase in business optimism about local conditions and future expectations.
  
• Issues like declining backlogs persisted, despite some recovery signs in vendor lead times and capacity utilization.
  
• Price growth for inputs and outputs moderated, with firms expecting further easing ahead.
  

The Richmond Manufacturing Index forecast suggests a slight improvement to -4, up from the previous reading of -5.

The next Richmond Manufacturing Index is set to be released on Tuesday at 2:00 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

Daily News Update​

​

27 March 2024​

Wednesday​

This Wednesday holds significant economic updates as Australia is set to release its annual Consumer Price Index (CPI) data, while Spain will unveil its yearly Spanish Flash CPI figures. Market observers eagerly anticipate these announcements, which could have noteworthy implications for both domestic and global economic conditions.​

AUD - CPI y/y​

The Consumer Price Index (CPI) year-over-year measures the change in the cost of goods and services consumed, released monthly approximately 25 days following the end of the month. This index is pivotal for traders as it encapsulates a significant portion of overall inflation, which influences currency valuations through central bank interest rate adjustments aimed at managing inflation. The CPI calculation involves sampling the average prices of a variety of goods and services and comparing these to previous samples to ascertain price movements.

In Australia, the Consumer Price Index (CPI) for January 2024 maintained its position at 3.4% year-on-year, aligning with the previous month's figures and falling slightly below the anticipated 3.6%. This marks the lowest inflation rate since November 2021, driven by decelerating price increases in key sectors. Specifically, transport costs saw a moderate rise of 3.0%, down from 3.6%, primarily due to reduced prices in automotive fuels. Similarly, the housing sector experienced a slowdown, with a 4.6% increase compared to the prior 5.2%, notably within new dwelling purchases by owner-occupiers which rose by 4.8%, a dip from 5.1%. The health sector also witnessed a slowdown in price growth to 3.9% from 4.7%. Contrarily, the food sector saw a price acceleration to 4.4% from 4.0% in December. Additionally, there was a positive turnaround in the prices of furnishings, household equipment & services, and clothing and footwear, which rebounded to 0.3% and 0.4% respectively, after previously recording declines. Excluding volatile items and travel, the core CPI indicator rose by 4.1% in January, a slight decrease from December's 4.2%. Despite these variations, inflation continues to exceed the Reserve Bank of Australia's target range of 2-3%, indicating persistent economic pressures.

TL;DR

• Australia's January 2024 Consumer Price Index (CPI) remained steady at 3.4% year-on-year, slightly below the expected 3.6%.
  
• Lowest inflation rate since November 2021, driven by slower price increases in key sectors.
  
• Transport costs rose by 3.0%, down from 3.6%, mainly due to decreased automotive fuel prices.
  
• Housing sector saw a slowdown, with a 4.6% increase compared to 5.2% previously.
  
• Health sector's price growth slowed to 3.9% from 4.7%.
  
• Food sector experienced an acceleration to 4.4% from 4.0%.
  
• Positive turnaround in prices of furnishings, household equipment & services, and clothing and footwear.
  
• Excluding volatile items and travel, core CPI rose by 4.1%, a slight decrease from December's 4.2%.
  
• Inflation persists above the Reserve Bank of Australia's target range of 2-3%, indicating ongoing economic pressures.
  

The forecast for Australia's CPI y/y is projected at 3.6%, a slight increase from the previous figure of 3.4%.

The upcoming CPI y/y release is scheduled for Wednesday at 12:30 AM GMT.

The last time, Australian CPI y/y was announced on the 28th of February, 2024. You may find the market reaction chart (XAUAUD M5) below:

EUR - Spanish Flash CPI y/y​

The Spanish Flash Consumer Price Index (CPI) year-over-year, an early indicator measuring the change in consumer goods and service prices, is issued monthly around the month's end. Since its inception in March 2011, the Flash version has garnered significant attention due to its precedence over the Final version, which, due to its lesser impact, is not widely reported. This early release is crucial for traders, as it reflects a substantial portion of total inflation, influencing currency valuation through potential central bank interest rate adjustments aimed at inflation control.

In February, Australia witnessed a decrease in the annual rate of the general Consumer Price Index (CPI) to 2.8%, marking a six-tenths drop from the previous month. This decline was notably influenced by certain sectors, particularly housing, which experienced a significant decrease of 4.2 points, reaching -2.7%, primarily due to reduced electricity prices. Additionally, the food and non-alcoholic beverages category saw a decline to 5.3%, driven by lower prices of legumes, vegetables, and meat, though countered by increases in fruits, bread, cereals, and beverages compared to the previous year. On the other hand, transportation witnessed a notable increase, with a rate of 2.4%, attributed mainly to rising fuel and lubricant prices. However, core inflation, excluding unprocessed food or energy products, decreased slightly to 3.5% annually.

TL;DR

• February 2024 saw Australia's general Consumer Price Index (CPI) annual rate drop to 2.8%, down by six-tenths from the prior month.
  
• Housing sector notably declined by 4.2 points to -2.7%, primarily due to reduced electricity prices.
  
• Food and non-alcoholic beverages category declined to 5.3%, led by lower prices of legumes, vegetables, and meat, offset by increases in fruits, bread, cereals, and beverages.
  
• Transportation witnessed a notable increase to 2.4%, driven by rising fuel and lubricant prices.
  
• Core inflation, excluding unprocessed food or energy products, slightly decreased to 3.5% annually.
  

The forecast for the Flash CPI y/y stands at 2.4%, a decrease from the previous figure of 2.8%.

The upcoming Spanish Flash CPI y/y release is scheduled for Wednesday at 8:00 AM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

​

Daily News Update​

28 March 2024​

Thursday​

Thursday will witness significant economic data releases from key global economies, with Australia unveiling its Retail Sales month-on-month (m/m) figures, Canada announcing its Gross Domestic Product month-on-month (m/m), the US releasing its Final Gross Domestic Product quarter-on-quarter (q/q), Unemployment Claims, Chicago Purchasing Managers' Index (PMI), Pending Home Sales m/m, and Revised University of Michigan (UoM) Consumer Sentiment, while Japan will disclose its Core Consumer Price Index year-on-year (y/y).​

AUD - Retail Sales m/m​

The Monthly Retail Sales report, capturing the change in total retail sales value, is released approximately 35 days after each month's end, providing an initial glimpse into crucial consumer spending data. The report is issued in two versions, Preliminary and Final, approximately two weeks apart, with the Final version often not reported due to its reduced impact. Traders prioritize this data as it serves as the foremost indicator of consumer spending, a key driver of the majority of economic activity.

In January 2024, retail sales in Australia saw a notable uptick, rising by 1.1% month-over-month, in line with preliminary estimates. This positive trend followed a 2.1% decline in the previous month, as consumers capitalized on discounts during the Black Friday event. Notably, all retail industries contributed to this upturn, with sales rebounding across various sectors. Sales of clothing, footwear, personal accessories, household goods, department stores, and cafes/restaurants/takeaway food all experienced significant increases compared to the prior month's declines. Most states and territories also witnessed sales growth of 1.0% or more, except for Tasmania, which saw a 1.3% rise following a flat reading in December. Additionally, retail turnover for the year up to January accelerated to 1.1%, surpassing the previous 0.8% rise, marking the strongest gain since August 2021.

TL;DR

The expected Retail Sales m/m figure stands at 0.4%, a decrease from the previous outcome of 1.1%.

The upcoming Retail Sales m/m data is scheduled for release on Thursday at 12:30 AM GMT.

CAD – GDP m/m​

The monthly Gross Domestic Product (GDP) report, reflecting the inflation-adjusted value change in all goods and services produced by the economy, is published approximately 60 days following the month’s conclusion. Traders highly value this data as it represents the most comprehensive indicator of economic activity and serves as the principal measure of the economy’s overall health.

In December 2023, the national economy experienced a halt in its growth momentum, diverging from the positive trends observed in the preceding months. Despite the majority of sectors showing increased activity, the Real Gross Domestic Product (GDP) indicated no significant change during the month, indicating stagnation. Within the economy, the goods-producing segment saw a slight downturn of 0.2%, primarily due to setbacks in utilities, construction, and manufacturing. Conversely, the services-producing sectors remained relatively stable, with growth in most areas offsetting contractions in specific sectors like educational services and healthcare. This mixed performance across sectors highlights the intricate challenges in maintaining consistent economic growth amidst fluctuating industrial performances.

TL;DR

The forecast for GDP m/m stands at 0.4%, showing an increase from the previous outcome of 0%.

The upcoming GDP m/m data is scheduled for release on Thursday at 12:30 PM GMT.

The last time, the Canadian GDP m/m was announced on the 29th of February, 2024. You may find the market reaction chart (CADJPY M5) below:

USD – Final GDP q/q​

The Final GDP report, detailing the annualized quarter-over-quarter change in the inflation-adjusted value of all goods and services produced within the economy, is issued quarterly, roughly 85 days after the quarter concludes. This report is the last of three GDP versions—Advance, Preliminary, and Final—released one month apart, with the Advance version typically having the greatest market impact. Traders consider this data crucial as it offers the widest scope of economic activity and serves as the fundamental indicator of economic health.

In the fourth quarter of 2023, real gross domestic product (GDP) in the United States increased at an annual rate of 3.2%, slightly down from the previous quarter’s growth of 4.9%. This growth was primarily driven by increases in consumer spending, exports, and state and local government spending, despite a rise in imports. Consumer spending saw increases in both services and goods, particularly in healthcare and food services. Exports rose in both goods and services, with petroleum and financial services leading the gains. State and local government spending also contributed to the growth, driven by investment in structures and consumption expenditures. However, compared to the third quarter, GDP decelerated due to a downturn in inventory investment and slower federal government spending, housing investment, and consumer spending. Prices, personal income, and saving also experienced fluctuations throughout the quarter, with real disposable personal income increasing by 2.2%. Overall, in 2023, real GDP increased by 2.5%, with notable contributions from consumer spending, business investment, and government spending, partially offset by decreases in housing investment and inventory investment.

TL;DR

• Q4 2023 Real GDP growth in the US: 3.2% annual rate, down from 4.9% in the previous quarter.
• Main drivers: Increases in consumer spending, exports, and state/local government spending.
• Consumer spending highlights: Growth in services and goods, especially healthcare and food services.
• Export growth: Both goods and services, led by petroleum and financial services.
• State and local government boost: Through investment in structures and consumption expenditures.
• Deceleration factors: Lower inventory investment, slower federal spending, reduced housing investment, and subdued consumer spending.
• 2023 annual Real GDP growth: 2.5%, fueled by consumer spending, business investment, and government spending, despite drops in housing and inventory investment.

The forecast for Final GDP q/q remains unchanged at 3.2%, consistent with the previous figure.

The upcoming release of the Final GDP q/q is scheduled for Thursday at 12:30 PM GMT.

The last time the US Final GDP q/q was announced on the 21st of December, 2023. You may find the market reaction chart (EURUSD M5) below:

USD – Unemployment Claims​

The Unemployment Claims report, indicating the count of individuals filing for first-time unemployment benefits in the preceding week, is issued weekly, typically on the Thursday following the week’s end. As the most immediate piece of economic data available, its market influence varies weekly, garnering particular attention during periods of significant economic change or when figures reach unusual highs or lows. Traders monitor this metric closely, not only because it is often considered a lagging indicator, but also due to its implications for overall economic health, given the strong correlation between consumer spending and labor market conditions, which in turn plays a critical role in guiding the nation’s monetary policy decisions.

In the week ending March 16, there was a marginal decrease of 2,000 in seasonally adjusted initial claims for unemployment benefits in the United States, bringing the figure to 210,000, while the corresponding 4-week moving average increased slightly by 2,500 to 211,250. Concurrently, the advance seasonally adjusted insured unemployment rate held steady at 1.2 percent for the week ending March 9, with the number of insured unemployed individuals rising by 4,000 to 1,807,000. Despite this uptick, the 4-week moving average for insured unemployment experienced a modest increase of 5,000, reaching 1,802,250. These statistics offer valuable insights into the ongoing dynamics of the labor market, indicating fluctuations in both initial claims and insured unemployment rates.

TL;DR

The Unemployment Claims forecast is set at 212,000, showing a slight increase from the previous result of 210,000.

The upcoming Unemployment Claims report is scheduled for release this Thursday at 12:30 PM GMT.

The last time, the US Unemployment Claims report was announced on the 21st of March, 2024. You may find the market reaction chart (USDCHF M5) below:

USD - Chicago PMI​

The Chicago Purchasing Managers Index (PMI), a diffusion index derived from a survey of approximately 200 purchasing managers in the Chicago area, is released on the last business day of each month. Exclusive early access is provided to MNI subscribers three minutes prior to the public release, often influencing initial market reactions. A reading above 50 signifies economic expansion, while below 50 indicates contraction. This index is closely watched by traders as a leading indicator of economic health, reflecting the timely and informed perspectives of purchasing managers on various business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory levels.

In February 2024, the Chicago Business Barometer, also known as the Chicago PMI, dropped to 44 from 46 in the prior month, falling below market forecasts of 48. This latest reading indicated that economic activity in Chicago contracted for the third consecutive month, and at the fastest rate in seven months.

The forecast for the Chicago PMI indicates a rise to 45 contrasting with the previous outcome of 44.

The upcoming release of the Chicago PMI is scheduled for Thursday at 1:45 PM GMT.

USD - Pending Home Sales m/m​

The Pending Home Sales report, disclosing the monthly change in the volume of existing homes under contract yet pending closure—excluding new constructions—is issued approximately 28 days following the month's end. Although released about a week after Existing Home Sales data, it provides a more forward-looking insight into the housing market, as contracts are typically signed weeks before a sale is officially recorded. Traders value this metric as a leading indicator of economic vitality, recognizing the extensive economic activity spurred by home sales, from renovations and mortgage financing to brokerage services.

In January 2024, pending home sales in the United States experienced a significant decline of 4.9% from the previous month, marking the largest drop since August 2023 and notably missing forecasts of a 1% expansion. The downturn was particularly pronounced in the South and the Midwest, with decreases of 7.3% and 7.6% respectively, offsetting marginal increases in the West (0.5%) and the Northeast (0.8%). Lawrence Yun, Chief Economist of the National Association of Realtors (NAR), attributed the trend to consumer sensitivity towards fluctuations in mortgage rates despite favorable economic conditions such as a solid job market and record-high total wealth driven by gains in the stock market and home prices.

TL;DR

The Pending Home Sales m/m forecast suggests an increase of 2.7%, reversing from the previous decline of -4.9%.

The upcoming release of the Pending Home Sales m/m data is scheduled for Thursday at 2:00 PM GMT.

The last time, US Pending Home Sales m/m was announced on the 29th of February, 2024. You may find the market reaction chart (GBPUSD M5) below:

USD - Revised UoM Consumer Sentiment​

The Revised University of Michigan Consumer Sentiment Index, a composite measure obtained from a survey of approximately 500 consumers, is released in two versions approximately 15 days apart—Preliminary and Revised—with the Preliminary data generally having a greater market impact due to its earlier release. This index, which gauges consumers' perspectives on both current and future economic conditions, serves as a critical leading indicator for traders, reflecting financial confidence and its significant influence on consumer spending, a key driver of economic activity.

In March 2024, the University of Michigan's consumer sentiment for the US declined slightly to 76.5, marking the lowest level in three months, down from 76.9 in February and falling below forecasts of 76.9. Preliminary estimates revealed that while there were minor improvements in personal finances, there were modest decreases in expectations for business conditions. Despite this, consumers displayed uncertainty regarding the current trajectory of the economy, especially in the long term, as they await the outcome of the upcoming November election. The expectations gauge dropped to 74.6 from 75.2, while the current conditions sub index remained steady at 79.4. Additionally, inflation expectations for the year ahead remained unchanged at 3%, and those for the five-year outlook remained steady at 2.9%.

TL;DR

The forecast for the Revised UoM Consumer Sentiment indicates a reading of 77, an increase from the previous outcome of 76.5.

The upcoming release of the Revised UoM Consumer Sentiment is scheduled for Thursday at 2:00 PM GMT.

The last time, the Revised UoM Consumer Sentiment report is announced on the 1st of March, 2024. You may find the market reaction chart (XAUUSD M5) below:

JPY - Tokyo Core CPI y/y​

The Tokyo Core Consumer Price Index (CPI) year-over-year, tracking changes in consumer goods and services prices in Tokyo excluding fresh food, is issued monthly, typically on the last Friday of the month. As Japan's most populous city, Tokyo's CPI data precedes the national figures by a month, rendering it a crucial early indicator of consumer inflation. Although its market impact varies, it generally remains moderate. Traders pay attention to this data as consumer prices significantly contribute to overall inflation, which influences currency valuation through potential central bank actions to manage inflation.

In February 2024, the core consumer price index (CPI) for the Ku-area of Tokyo in Japan increased by 2.5% year-on-year, marking the highest reading in four months, aligning with expectations. This acceleration from an upwardly revised 1.8% gain in January pushed the index above the central bank's 2% target. Bank of Japan (BOJ) board member Hajime Takata has recently advocated for discussions on ending ultra-loose monetary policies, including negative interest rates and bond yield control. However, BOJ Governor Kazuo Ueda cautioned against prematurely assuming sustained achievement of the 2% target, emphasizing the necessity to analyze wage outlook data. Ueda highlighted the importance of confirming the initiation and strengthening of a positive wage-inflation cycle before considering policy adjustments.

TL;DR

The forecast for Tokyo Core CPI y/y is projected at 2.4%, slightly down from the previous figure of 2.5%.

The upcoming Tokyo Core CPI y/y is scheduled for release on Thursday at 11:30 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

29th March 2024

Friday
​

The United States is scheduled to unveil a significant economic indicator on Friday, with the announcement of the monthly Core Personal Consumption Expenditures (PCE) Price Index.

USD – Core PCE Price Index m/m​

The Core PCE Price Index m/m tracks changes in the prices of goods and services purchased by consumers, excluding food and energy. It is released monthly, approximately 30 days after the month ends. Unlike the Core CPI, which measures broader inflation trends, the Core PCE focuses solely on goods and services consumed by individuals and is weighted according to total expenditure per item. Despite being overshadowed by the CPI in terms of attention, the Core PCE remains crucial as it serves as the Federal Reserve’s primary inflation measure. Traders closely monitor this index as inflation impacts currency valuation, prompting central banks, like the Federal Reserve, to adjust interest rates in response to inflationary pressures.

In January 2024, Core PCE prices in the US, excluding food and energy, surged by 0.4% from the previous month, marking the highest increase since February 2023 and aligning with market forecasts. This followed a downwardly revised 0.1% uptick in December. Additionally, Core PCE prices rose by 2.8% compared to the previous year, representing the slowest growth since March 2021 and decelerating from 2.9% in December.

The forecast for the Core PCE Price Index m/m indicates a decrease to 0.3% from the previous outcome of 0.4%.

The upcoming Core PCE Price Index m/m is scheduled for Thursday at 12:30 PM GMT.

The last time, Core PCE Price Index m/m was announced on the 29th February, 2024. You may find the market reaction chart (GBPUSD M5) below:

USD - Fed Chair Powell Speaks​

Federal Reserve Chair Jerome Powell, who has been serving in this role since February 2018 and is expected to continue until February 2026, previously served as a Fed Governor from May 2012 to January 2018. He is scheduled to participate in a moderated discussion with Kai Ryssdal at the Macroeconomics and Monetary Policy Conference in San Francisco, where he will engage with audience questions. As the head of the central bank, Powell has significant influence over the nation's short-term interest rates, making him the most influential figure regarding the value of the nation's currency. Traders pay close attention to his speeches, which often lead to market volatility, as they seek hints about future monetary policies. His remarks are particularly impactful; a more hawkish stance than anticipated is generally seen as beneficial for the currency.

The next speech by Federal Reserve Chair Powell is scheduled for Friday at 3:30 PM GMT.

 

[Daniel LQDFX]

Daily News Update​

​

31 March 2024​

Sunday​

On Sunday, a significant announcement is expected from China with the unveiling of its Manufacturing Purchasing Managers' Index (PMI), an event poised to have a considerable impact on the market due to its insights into the health and trajectory of the Chinese manufacturing sector. Accompanying this, China's Non-Manufacturing PMI and Japan's Tankan Large Manufacturers Index for Q1 will also be released, both anticipated to have a moderate effect on the markets. These indicators are crucial as they provide a comprehensive view of the economic activities within China and Japan, covering both the manufacturing and services sectors, and are keenly awaited for their potential influence on global economic dynamics.​

CNY – Manufacturing PMI​

The Manufacturing Purchasing Managers' Index (PMI) is a crucial economic indicator derived from a monthly survey of 3,000 purchasing managers in the manufacturing sector. Released on the last day of each month, the PMI provides insights into the industry's health, with a score above 50 indicating expansion and below 50 signaling contraction. Its significance is amplified when released before the Caixin Manufacturing PMI due to their close correlation. Given China's significant role in the global economy, this data can greatly influence currency markets and investor sentiment. The PMI is valued for its immediacy and relevance, offering a glimpse into business conditions, including employment, production, orders, prices, deliveries, and inventories, thus serving as a leading indicator of economic health.

In February, China's factory activity contracted for the fifth consecutive month, with the official manufacturing purchasing managers index (PMI) at 49.1, indicating continued weakness in the country's demand affecting manufacturers across Asia. Despite this, the Caixin PMI, which focuses on smaller firms in China, showed an improvement to 50.9. Across North Asia, countries like Taiwan and Japan experienced declines in their PMIs due to reduced domestic and international customer spending, with Taiwan's PMI at 48.6 and Japan's at 47.2, both indicating contraction in manufacturing. Southeast Asian nations also faced challenges, with Thailand's PMI dropping to 45.3 and only Indonesia, the Philippines, and Vietnam recording PMIs above 50. The region is grappling with rising inflationary pressures and tepid demand, making it difficult for manufacturers to pass on the increased costs of raw materials. This downturn in manufacturing activity comes amid the World Trade Organization's warnings of weaker global trade performance, influenced by economic headwinds and the resurgence of protectionism.

TL;DR

Country/Region	PMI Score	Trend	Notes
China (Official)	49.1	Contracting	5th consecutive month of contraction.
China (Caixin)	50.9	Expanding	Focuses on smaller firms; shows improvement.
Taiwan	48.6	Contracting	Decline due to reduced spending domestically and internationally.
Japan	47.2	Contracting	Decrease in PMI linked to lower domestic and international spending.
Thailand	45.3	Contracting	Facing economic challenges.
Indonesia	>50	Expanding	One of the few Southeast Asian nations with PMI above 50.
Philippines	>50	Expanding	Recording PMIs above 50, indicating expansion.
Vietnam	>50	Expanding	PMI above 50, showing manufacturing growth.
Southeast Asia	-	Mixed	Rising inflation and tepid demand impacting the region.
Global Context	-	-	Weaker global trade performance due to economic headwinds and resurgence of protectionism.

The forecast for Manufacturing PMI is expected to reach 50.1, indicating a positive shift from the previous reading of 49.1.

The upcoming Manufacturing PMI is scheduled for Sunday at 1:30 AM GMT.

The last time, the Chinese Manufacturing PMI was announced on the 1st of March, 2024. You may find the market reaction chart (USDCNH M5) below:

CNY - Non-Manufacturing PMI​

The Non-Manufacturing Purchasing Managers' Index (PMI) measures the level of a diffusion index based on surveys of purchasing managers in the services industry. It is released monthly, typically on the last day of the month. A reading above 50.0 indicates industry expansion, while below 50.0 suggests contraction. Chinese data can significantly influence currency markets due to China's global economic impact and its effect on investor sentiment. The index shifted from non-seasonally adjusted to seasonally adjusted data starting in April 2012. Traders closely monitor this index because it serves as a leading indicator of economic health. As businesses react swiftly to market conditions, the insights provided by purchasing managers regarding employment, production, new orders, prices, supplier deliveries, and inventories offer valuable real-time information about the economy's status.

In February, the non-manufacturing Purchasing Managers' Index (PMI) for China rose to 51.4 percent, marking a notable increase of 0.7 percentage points compared to the previous month. This surpassed market expectations of 50.8, showcasing the 14th consecutive month of expansion in services activity and the strongest pace since September of the previous year. Despite a softer decline in foreign sales (47.3 versus 45.2 in January) and unchanged employment rates (47.0 versus 47.0), new orders experienced a further deterioration (46.8 versus 47.6), dampening hopes for increased domestic demand during the Spring Festival celebration. Additionally, the delivery time index decreased from January's three-month high (50.3 versus 52.0). Input costs saw a rise after declining for four consecutive months (50.6 versus 49.6), while selling prices decreased for the fifth month in a row (48.5 versus 48.9). Finally, sentiment softened for the second consecutive month (57.7 versus 59.7).

TL;DR

Metric	February Score	Change from January	Notes
Non-manufacturing PMI	51.4	+0.7	14th consecutive month of expansion; strongest since last September.
Market Expectations	-	-	Surpassed expectations of 50.8.
Foreign Sales	47.3	+2.1	Softer decline compared to January.
Employment	47.0	No change	Remained unchanged from January.
New Orders	46.8	-0.8	Further deterioration, affecting hopes for increased domestic demand.
Delivery Time Index	50.3	-1.7	Decreased from January's three-month high.
Input Costs	50.6	+1.0	Increased after declining for four consecutive months.
Selling Prices	48.5	-0.4	Decreased for the fifth consecutive month.
Sentiment	57.7	-2.0	Softened for the second consecutive month.

The forecast for Non-Manufacturing PMI stands at 51.3, showing a slight decrease from the previous outcome of 51.4.

The upcoming Non-Manufacturing PMI is scheduled for Sunday at 1:30 AM GMT.

JPY - Tankan Manufacturing Index​

The Tankan Manufacturing Index, released quarterly, is a crucial diffusion index based on a survey of approximately 1,200 large manufacturers in Japan, where values above 0.0 signify improving conditions. Esteemed for its comprehensive sample size and the credibility of its source, which updated its calculation methodology in April 2004, this index is regarded as the premier indicator of the manufacturing sector's health in the Japanese economy. Traders value this index highly as it serves as a leading indicator of economic vitality, reflecting businesses' rapid responses to market conditions and providing early insights into potential shifts in economic activities like spending, hiring, and investment.

In Q4 2023, the Bank of Japan's Tankan index for large manufacturers surged to 12, marking the highest level since Q1 2022 and surpassing the market expectations of 10, indicating a robust uptick in business confidence across various sectors. Notably, firms in the pulp & paper, ceramics, iron & steel, and motor vehicles sectors showed significant improvement in sentiment, with some sectors like non-ferrous metals and processed metals rebounding from negative to positive territory. However, the mood was stable in the petroleum & coal products sector and showed a slight decline in chemicals, business-oriented machinery, and shipbuilding & heavy machinery, with a notable downturn in lumber & wood products. Alongside the positive sentiment, large firms are setting ambitious plans, projecting a 13.5% increase in capital expenditure for the current fiscal year ending in March 2024, which is higher than the forecasted 12.4% and reflects a continuation of strong investment trends from the previous year.

TL;DR

Sector	Sentiment Change	Notes
Overall Large Manufacturers	Increase	Tankan index surged to 12, highest since Q1 2022.
Pulp & Paper	Significant Improvement	Part of sectors with notable sentiment improvement.
Ceramics	Significant Improvement	Included in sectors with enhanced business confidence.
Iron & Steel	Significant Improvement	Demonstrated significant improvement in sentiment.
Motor Vehicles	Significant Improvement	Showed notable uplift in sentiment.
Non-Ferrous Metals	From Negative to Positive	Rebounded to positive sentiment territory.
Processed Metals	From Negative to Positive	Transitioned from negative to positive sentiment.
Petroleum & Coal Products	Stable	Sentiment remained unchanged, indicating stability.
Chemicals	Slight Decline	Experienced a minor downturn in sentiment.
Business-Oriented Machinery	Slight Decline	Showed a small decrease in business confidence.
Shipbuilding & Heavy Machinery	Slight Decline	Sentiment dipped slightly.
Lumber & Wood Products	Notable Downturn	Faced a significant decline in sentiment.

The forecast predicts a figure of 10, compared to the previous result of 12.

The next Tankan Manufacturing Index is set to be released on Sunday at 11:50 PM GMT.

1 April 2024​

Monday​

On April 1st, a crucial day for international financial markets, the focus will be on the high-impact release of the US ISM Manufacturing PMI, a key indicator of the health of the United States' manufacturing sector and a potential influencer of global economic policies and market sentiments. Alongside this, medium-impact announcements will be observed, including China's Caixin Manufacturing PMI, offering insights into its manufacturing industry, and the ISM Manufacturing Prices from the US, signaling potential inflationary pressures. Also, the S&P Global Manufacturing PMI from Canada and Judo Bank Manufacturing PMI Final from Australia will be under scrutiny by investors and policymakers for their implications on the economic outlook and policy decisions in the respective countries, especially in the nuanced post-pandemic economic landscape.​

CNY - Caixin Manufacturing PMI​

The Caixin Manufacturing Purchasing Managers' Index (PMI) is a crucial indicator of economic health within the manufacturing sector, derived from monthly surveys of around 500 purchasing managers. These surveys gauge various aspects of business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. A PMI score above 50 signals industry expansion, while a score below 50 indicates contraction. Between February 2011 and September 2015, there were two versions of the report: Flash and Final, with the 'Previous' figure during this period referring to the 'Actual' figure from the Flash release, leading to seemingly disjointed historical data. Traders pay close attention to this index as it provides early insights into the sector's economic health, reflecting the responsive nature of businesses to changing market conditions through the lens of their purchasing managers.

In February 2024, the Caixin China General Manufacturing PMI reported a marginal improvement to 50.9 from 50.8 in January, marking the fourth consecutive month of growth in the manufacturing sector. This slight uptick was driven by accelerated growth in production, domestic, and overseas demand, with new export orders reaching a 12-month high. Despite these positive trends, the manufacturing employment index declined for the sixth consecutive month, indicating ongoing job market contraction as firms continued to prioritize cost reduction and efficiency. Input cost inflation eased to a seven-month low, and in response to intense market competition, manufacturers reduced their selling prices for the second month in a row. Although supplier logistics faced minor delays due to adverse weather conditions, optimism in the sector rose, with future output expectations reaching their highest level since April 2023. The data reflects a sustained but cautious recovery in China's manufacturing sector, with ongoing challenges such as deflationary pressures and insufficient demand.

TL;DR

• Caixin China General Manufacturing PMI slightly rose to 50.9 in February 2024, marking the fourth consecutive month of sector growth.
  
• The increase was fueled by faster production and demand growth, both domestically and internationally, with new export orders hitting a 12-month peak.
  
• Manufacturing employment fell for the sixth straight month, highlighting ongoing job market shrinkage amid cost-cutting measures.
  
• Input cost inflation decreased to a seven-month low, and manufacturers lowered selling prices due to intense competition.
  
• Minor supplier delivery delays occurred due to adverse weather, yet sector optimism reached its highest since April 2023, signaling cautious recovery.
  

The upcoming Caixin Manufacturing PMI is set to be released on Monday at 1:45 AM GMT.

The anticipated Caixin Manufacturing PMI is projected at 51, showing a slight increase from the previous figure of 50.9.

CAD - S&P Global Manufacturing PMI​

The Manufacturing Purchasing Managers Index (PMI), issued monthly by S&P Global, serves as a crucial barometer for Canada's manufacturing sector, relying on surveys from senior executives in the private sector to gauge business activity. These responses, indicating month-over-month changes, help predict shifts in key economic indicators like GDP, industrial output, employment, and inflation. The PMI operates on a scale from 0 to 100, where a reading above 50 signifies expansion in the manufacturing sector, potentially bolstering the Canadian Dollar (CAD), while a score below 50 suggests contraction, which could negatively affect the CAD's value.

In February 2024, the S&P Global Canada Manufacturing PMI inched closer to stabilization, registering at 49.7, up from 48.3, signaling the smallest decline in factory activity over ten months. This modest uplift was attributed to a less pronounced reduction in new orders, despite ongoing concerns about weak client demand leading to a slight decrease in output and continued reliance on inventory due to insufficient orders. Elevated input costs further exacerbated the situation, leading to higher input inflation and extended supply chain lead times. However, in a positive turn, the manufacturing sector saw job growth for the first time in four months. Companies remain optimistic, anticipating that a better economic environment in the near future will boost sales.

TL;DR

Metric	February 2024 Value	Change from Previous Month	Notes
S&P Global Canada PMI	49.7	+1.4	Smallest decline in factory activity in ten months.
New Orders	-	Less pronounced reduction	Despite weak client demand, the decline in new orders eased.
Output	-	Slight decrease	Output dropped slightly due to weak demand.
Inventory Usage	-	Continued reliance	Firms relied on inventory due to insufficient orders.
Input Costs	-	Increase	Elevated input costs led to higher input inflation.
Supply Chain Lead Times	-	Extended	Input cost rise resulted in longer supply chain lead times.
Employment	-	Growth	First job growth in the sector in four months.
Business Optimism	-	-	Companies optimistic about a better economic environment.

The forecast for the S&P Global Manufacturing PMI suggests an improvement to 50.3, up from the previous figure of 49.7.

The next release of the S&P Global Manufacturing PMI is set for Monday at 1:30 PM GMT.

USD - ISM Manufacturing PMI​

The ISM Manufacturing PMI is a crucial economic indicator derived from a monthly survey of approximately 300 purchasing managers in the manufacturing industry. Released on the first business day following the end of the month, it measures the level of a diffusion index based on these managers' perspectives on various business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. A reading above 50.0 signals industry expansion, while below 50.0 suggests contraction. Traders and analysts closely monitor this index as it serves as a leading indicator of economic health, reflecting the quick adjustments businesses make in response to changing market conditions, and offering insights into the companies' views on the economy through the lens of those who are possibly the most informed on current business trends - the purchasing managers.

In February 2024, the US manufacturing sector continued its contraction for the 16th consecutive month, as indicated by the Manufacturing ISM Report On Business. The Manufacturing PMI dipped to 47.8, marking a decline in economic activity within the sector. This contraction is attributed to a slowdown in new orders and production, alongside a decrease in employment levels. Despite these challenges, there were some positive developments, such as a slight increase in supplier deliveries and a growth in exports and imports, indicating some resilience in the sector. Notably, industries such as Fabricated Metal Products, Chemical Products, and Transportation Equipment showed growth, highlighting pockets of strength amidst the overall contraction. The report underscores the nuanced dynamics within the manufacturing landscape, with signs of potential recovery in demand and a cautious optimism for the future, despite the prevailing headwinds.

TL;DR

Metric	February 2024 Value	Trend	Notes
Manufacturing PMI	47.8	Contracting	16th consecutive month of contraction in the manufacturing sector.
New Orders	-	Decrease	Slowdown contributing to overall sector contraction.
Production	-	Decrease	Reduction in production levels.
Employment	-	Decrease	Decline in employment levels within the sector.
Supplier Deliveries	-	Increase	Slight improvement, indicating some sector resilience.
Exports & Imports	-	Growth	Indicating pockets of strength despite overall contraction.
Growing Industries	-	-	Fabricated Metal Products, Chemical Products, and Transportation Equipment show growth.
Overall Outlook	-	Cautiously Optimistic	Signs of potential recovery with cautious optimism for the future.

The upcoming ISM Manufacturing PMI is set to be announced on Monday at 2:00 PM GMT.

The forecast for ISM Manufacturing PMI is expected to rise slightly to 48.5, up from the previous figure of 47.8.

The last time, US ISM Manufacturing PMI was announced on the 1st of March, 2024. You may find the market reaction chart (XAUUSD M5) below:

USD – ISM Manufacturing Prices​

The ISM Manufacturing Prices index is a key component of the broader Purchasing Managers’ Index (PMI), specifically focusing on the price level for goods and services within the manufacturing sector. It is based on a survey of around 300 purchasing managers, who are asked to provide their insights on the relative level of prices paid. Released monthly on the first business day after the month ends, this diffusion index serves as a significant gauge of inflation within the manufacturing industry. A reading above 50.0 indicates that prices are rising, while a figure below 50.0 suggests falling prices. Traders and economic analysts pay close attention to this index as it acts as a leading indicator of consumer inflation, reflecting the tendency for businesses to pass on higher costs to consumers, thereby influencing overall economic conditions and monetary policy decisions.

In February 2024, the Manufacturing ISM Report On Business indicated that the Prices Index, which measures the cost dynamics within the manufacturing sector, registered at 52.5, experiencing a slight decline of 0.4 percentage points from January’s 52.9. Despite the overall contraction in the manufacturing sector, with the Manufacturing PMI standing at 47.8, the Prices Index remaining above 50 suggests that prices are still increasing, albeit at a slower pace. This moderation in price increases reflects the ongoing adjustments within the manufacturing sector, amidst broader economic activities that continue to expand and varied performance across different manufacturing industries.

TL;DR

• Prices Index at 52.5, down 0.4 points from January, indicating slower price increases.
  
• Manufacturing PMI at 47.8, showing ongoing sector contraction.
  
• Despite contraction, some manufacturing industries perform variably, reflecting broader economic activity.
  

The next ISM Manufacturing Prices is scheduled for release onMonday at 2:00 PM GMT.

The forecast for ISM Manufacturing Prices suggests a slight increase to 52.8 from the previous outcome of 52.5.

AUD - Judo Bank Manufacturing PMI​

The Judo Bank Australia Manufacturing PMI, compiled by S&P Global, is derived from monthly surveys sent to approximately 400 manufacturing purchasing managers, with the headline Purchasing Managers' Index (PMI) being a composite measure reflecting the weighted average of five key indices: New Orders (30%), Output (25%), Employment (20%), Suppliers' Delivery Times (15%, inverted to align directionally with other indices), and Stocks of Purchases (10%). The PMI scale ranges from 0 to 100, where readings above 50 signify expansion and those below 50 denote contraction in the manufacturing sector compared to the preceding month.

The Judo Bank Flash Australia Manufacturing PMI dropped to 46.8 in March from 47.8 in February, marking the most significant contraction in the manufacturing sector since May 2020, flash estimates reveal. This decline was primarily fueled by a substantial decrease in new orders, which consequently led to a marked reduction in production levels. Facing dwindling demand, manufacturers have responded by reducing their workforce, scaling back on purchases, and trimming inventory levels. Additionally, price pressures have softened, evidenced by lower inflation rates for both input costs and output prices. Furthermore, the overall business outlook has dimmed, reaching its lowest level of optimism since November 2023, amid growing concerns over high interest rates and challenging economic conditions impacting demand.

TL;DR

• Judo Bank Flash Australia Manufacturing PMI fell to 46.8 in March from February's 47.8, the largest contraction since May 2020.
  
• Sharp decrease in new orders led to significant production cuts.
  
• Manufacturers reduced workforce, cut purchases, and trimmed inventories due to falling demand.
  
• Price pressures eased, with lower inflation for input costs and output prices.
  
• Business optimism hit its lowest since November 2023, with concerns over high interest rates and tough economic conditions.
  

The projected Judo Bank Manufacturing PMI stands at 46.8, reflecting a decline from the previous figure of 47.8.

The upcoming Judo Bank Manufacturing PMI is set to be published on Monday at 10:00 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

Daily News Update​

​

02 April 2024​

Tuesday​

On Tuesday, the financial markets will be keenly focused on a series of pivotal economic updates, starting with insights from the Reserve Bank of Australia's Monetary Policy Meeting minutes, revealing the country's monetary policy future. The day will also feature Germany's Preliminary Consumer Price Index data and the UK's Nationwide Housing Prices, which will offer important insights into inflation and housing market trends, respectively. Significantly, Germany's Prelim CPI month-on-month data and the United States' JOLTS Job Openings report are expected to have a substantial impact on market dynamics, reflecting critical inflation and employment trends in two of the world's leading economies. Moreover, the final manufacturing PMIs from Germany, Spain, Italy, and France will also be disclosed, poised to influence market sentiments moderately. These combined disclosures are set to provide a comprehensive view of the global economic environment, guiding investors and policymakers in their decisions.​

AUD - Monetary Policy Meeting Minutes​

The Monetary Policy Meeting Minutes are an essential document released eight times a year, typically two weeks following the announcement of the Cash Rate. These minutes offer a comprehensive record of the Reserve Bank Board's most recent meeting, shedding light on the in-depth discussions and economic analyses that shaped their decision regarding interest rate settings. Traders and financial analysts closely monitor these minutes for any signs of a hawkish stance—indicating a potential increase in interest rates—which is generally seen as positive for the currency, as it can lead to higher yields for investors. The minutes provide valuable insights into the economic conditions and considerations that influence the central bank's policy decisions, making them a critical resource for understanding future monetary policy directions.

In its first meeting of 2024, the Reserve Bank of Australia had decided to keep the cash rate unchanged at 4.35%, following a cumulative increase of 425 basis points over the previous two years aimed at curbing post-pandemic inflationary pressures. Despite a softening in cost pressures, inflation had continued to be pronounced, particularly driven by sustained service sector prices. The central bank had left the door open for potential future rate hikes, indicating such decisions would be guided by incoming data and risk evaluations. It had reiterated its commitment to guiding inflation back within the 2-3% target range by 2025, with particular emphasis on achieving the midpoint by 2026. Additionally, the bank had confirmed its ongoing commitment to closely watch over global economic trends, domestic demand, inflation trajectories, and labor market conditions, all the while maintaining the Exchange Settlement balances rate at 4.25%.

TL;DR

Aspect	Details
Cash Rate	Unchanged at 4.35%
Previous Adjustments	Cumulative increase of 425 basis points over the past two years
Objectives	Aimed at curbing post-pandemic inflationary pressures
Inflation	Pronounced, particularly driven by sustained service sector prices
Future Rate Hikes	Possibility left open, subject to incoming data and risk evaluations
Inflation Target	Guiding inflation back within the 2-3% target range by 2025, with emphasis on achieving the midpoint by 2026
Monitoring Factors	Global economic trends, domestic demand, inflation trajectories, and labor market conditions
Exchange Settlement Balances Rate	Maintained at 4.25%

The upcoming Monetary Policy Meeting Minutes are set to be published on Tuesday at 12:30 AM GMT.

GBP - Nationwide Housing Prices m/m​

The Nationwide Housing Price Index (HPI) is a significant indicator for the UK, tracking changes in the selling prices of homes with mortgages supported by Nationwide and standing as one of the earliest measures of housing inflation in the country. When the index reports a reading above market expectations, it is generally viewed as a positive or bullish signal for the British Pound (GBP), suggesting a robust housing market. Conversely, readings below expectations are seen as negative or bearish for the GBP, indicating potential softness in the housing sector.

In February 2024, the Nationwide House Price Index in the United Kingdom experienced a 0.7% increase from the previous month, matching the growth rate of the earlier period and surpassing market forecasts, which had anticipated a modest 0.3% rise.

The forecast for the monthly change in Nationwide Housing Prices is set at 0.3%, a decline from the previous month's increase of 0.7%.

The next Nationwide Housing Prices m/m is set to be released on Monday at 6:00 AM GMT.

GBP - Nationwide Housing Prices y/y​

The Nationwide House Price Index, compiled by the UK's second-largest mortgage provider, Nationwide Building Society, serves as an essential gauge of the country's average house price movements. Focusing solely on its mortgage approvals, Nationwide's index, which accounts for about 10% of the mortgage market, exclusively considers owner-occupied properties sold at genuine market values, excluding sales such as council estates. With its inception in 1952 for quarterly reports and an expansion to monthly indices in 1993, Nationwide provides a long-standing and reliable measure of property price trends, similar to the Halifax index in being volume-weighted based on typical transaction prices. Market analysts view readings above expectations as favorable for the British Pound (GBP), whereas figures below anticipated levels are seen as negative.

In February 2024, the Nationwide House Price Index in the United Kingdom witnessed a 1.2% increase from the year prior, marking an end to a year-long trend of declines and surpassing the anticipated 0.7% rise. This resurgence in the housing market is attributed to the reduced borrowing costs at the year's outset and a lessening strain on household finances. However, the ongoing uncertainty about future interest rate changes remains a potential hindrance to a full-fledged recovery in the housing sector. Despite the fact that borrowing costs are still below the highs seen last summer, there's been a notable increase in swap rates, which are crucial for setting fixed-rate mortgage prices, following their significant drop in late December.

TL;DR

Aspect	Details
House Price Index	Witnessed a 1.2% increase from the year prior, ending a year-long trend of declines
Anticipated Rise	Surpassed the anticipated 0.7% rise
Contributing Factors	Reduced borrowing costs at the year's outset, lessening strain on household finances
Uncertainty	Ongoing uncertainty about future interest rate changes remains a potential hindrance to full-fledged housing market recovery
Borrowing Costs	Still below highs seen last summer
Swap Rates	Notable increase following significant drop in late December, crucial for setting fixed-rate mortgage prices

The forecast for the Nationwide Housing Prices y/y is projected at 2.4%, showing an increase from the previous figure of 1.2%.

The upcoming announcement for the Nationwide Housing Prices y/y is scheduled for Monday at 6:00 AM GMT.

EUR - Spanish Manufacturing PMI​

The S&P Global Spain Manufacturing PMI, a key indicator derived from a survey of 400 industrial companies, gauges the manufacturing sector's health based on five weighted indexes: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%, inverted for comparable directionality), and Stock of Items Purchased (10%). A PMI reading above 50 signifies sector expansion, below 50 indicates contraction, and exactly 50 denotes no change. This index, released by S&P Global and Hamburg Commercial Bank (HCOB), is crucial for understanding business conditions in the manufacturing sector, which plays a significant role in Spain's GDP and, by extension, offers insights into the country's economic health and sentiment towards the Euro.

In February 2024, the HCOB Spain Manufacturing PMI climbed to 51.5 from 49.2 the previous month, outperforming the anticipated forecast of 50 and marking the sector's first expansion in almost a year. This positive shift was primarily driven by a slight increase in output and new orders, fueled by a resurgence in domestic demand. Additionally, employment and purchasing activities experienced growth. Despite these improvements, the month saw the most significant extension in delivery times since September 2022, attributed to disruptions in the Red Sea and related issues in the Suez Canal. On the pricing front, there was a nominal uptick in input costs, the first in a year, while output charges continued to fall, although at the slowest pace since the previous August, due to competitive pressures and strategies to attract new business. Moreover, business confidence soared to a two-year peak, bolstered by optimistic expectations of sustained sales and demand growth in the year ahead.

TL;DR

Aspect	Details
Manufacturing PMI	Climbed to 51.5 from 49.2 the previous month, marking sector's first expansion in almost a year
Performance vs. Forecast	Outperformed anticipated forecast of 50
Driving Factors	Slight increase in output and new orders, fueled by resurgence in domestic demand
Employment and Purchasing Activities	Experienced growth
Delivery Times	Saw the most significant extension since September 2022, attributed to disruptions in the Red Sea and issues in the Suez Canal
Input Costs	Nominal uptick, first in a year
Output Charges	Continued to fall, but at the slowest pace since the previous August, due to competitive pressures and strategies
Business Confidence	Soared to a two-year peak, bolstered by optimistic expectations of sustained sales and demand growth in the year ahead

The forecast for the Spanish Manufacturing PMI stands at 51, slightly below the previous reading of 51.5.

The next Spanish Manufacturing PMI is set to be released on Monday at 7:15 AM GMT.

EUR - Italian Manufacturing PMI​

The Manufacturing Purchasing Managers Index (PMI) for Italy, released by S&P Global and Hamburg Commercial Bank (HCOB), is a critical gauge of the manufacturing sector's health, influencing the broader economic outlook given the sector's substantial contribution to GDP. Derived from a survey of 400 industrial companies, the PMI assesses business conditions through a weighted composition of five key indices: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%, inverted for consistency), and Stock of Items Purchased (10%). A PMI reading above 50 signals expansion in the manufacturing sector, indicating bullish prospects for the Euro, while a reading below 50 suggests contraction, potentially bearish for the currency, with a score of 50 denoting stability.

In February 2024, the HCOB Italy Manufacturing PMI experienced a marginal increase to 48.7 from 48.5 in January, falling short of the anticipated 49.1 market expectations. This minor improvement, the least pronounced in an 11-month downturn, underscores the persistent challenges faced by Italy's manufacturing sector, attributed to subdued demand and ongoing geopolitical tensions. Despite nearing a year of contraction, the sector saw an acceleration in output decline, while delivery times from suppliers improved slightly, unaffected by the Red Sea crisis. Conversely, the rates of decline in new orders and inventory levels moderated, and for the first time in five months, firms reported workforce expansion. The price landscape continued to follow a deflationary trend. Nevertheless, future production outlooks among companies remained optimistic, hovering above historical averages, fueled by hopes for economic resurgence and more stable geopolitical conditions.

TL;DR

Aspect	Details
Manufacturing PMI	Marginal increase to 48.7 from 48.5 in January, falling short of anticipated 49.1 market expectations
Performance vs. Forecast	Minor improvement, least pronounced in an 11-month downturn
Challenges	Persistent challenges attributed to subdued demand and ongoing geopolitical tensions
Output and Delivery Times	Sector saw acceleration in output decline, while delivery times improved slightly, unaffected by the Red Sea crisis
New Orders and Inventory Levels	Rates of decline moderated, and for the first time in five months, firms reported workforce expansion
Price Landscape	Continued to follow a deflationary trend
Future Production Outlook	Optimistic outlook among companies, hovering above historical averages, fueled by hopes for economic resurgence and stable geopolitics

The forecast for the Italian Manufacturing PMI suggests a slight improvement to 48.8 from the previous reading of 48.7.

The upcoming Italian Manufacturing PMI is set to be released on Tuesday at 7:45 AM GMT.

EUR - French Final Manufacturing PMI​

The HCOB France Manufacturing PMI, compiled by S&P Global from monthly surveys of approximately 400 manufacturing purchasing managers, serves as a leading indicator of economic health. The PMI is a composite index based on five key components: New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%, inverted for comparability), and Stocks of Purchases (10%). It operates on a diffusion index scale from 0 to 100, where a reading above 50 signifies manufacturing expansion and below 50 indicates contraction. The index is closely monitored for its early insights into business conditions, including employment, production, and prices, reflecting the purchasing managers' current and relevant perspectives on the economy. Released monthly, on the first business day following the month's end, the PMI includes both Flash and Final reports, with the Flash release generally having a more significant market impact.

In March 2024, the S&P Global France Manufacturing PMI declined to 45.8 from February's one-year peak of 47.1, falling short of the expected 47.5, marking the 14th consecutive month of contraction in the sector. This downturn was characterized by the lowest output levels since January 2023 and a significant decline in sales, attributed to client reluctance, challenging economic conditions, and inflationary pressures. Despite these challenges, job losses in the sector were minimal, and supply chain disruptions from incidents in the Red Sea did not prevent an increase in delivery times, indicating some stability. Input costs rose to a near-year high in February, while selling prices increased at a more moderate rate, marking the softest rise in over three years. Nonetheless, manufacturers maintained a positive outlook for the next 12 months.

TL;DR

Aspect	Details
Manufacturing PMI	Declined to 45.8 from February's one-year peak of 47.1, falling short of the expected 47.5, marking the 14th consecutive month of contraction
Output and Sales Levels	Lowest output levels since January 2023, significant decline in sales attributed to client reluctance, challenging economic conditions, and inflationary pressures
Job Losses and Supply Chain	Minimal job losses, supply chain disruptions from incidents in the Red Sea did not prevent an increase in delivery times, indicating some stability
Input and Selling Prices	Input costs rose to a near-year high in February, while selling prices increased at a more moderate rate, marking the softest rise in over three years
Future Outlook	Manufacturers maintained a positive outlook for the next 12 months

The forecast for the French Manufacturing PMI suggests a decrease to 45.8 from the previous figure of 47.1.

The upcoming release of the French Final Manufacturing PMI is scheduled for Tuesday at 7:50 PM GMT.

EUR – German Final Manufacturing PMI​

The HCOB Germany Manufacturing PMI, crafted by S&P Global from surveys of around 420 manufacturing purchasing managers, serves as a pivotal gauge for Germany's manufacturing sector and, by extension, Europe's industrial health. The PMI, a composite index based on five key components—New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%, inversely calculated), and Stocks of Purchases (10%)—provides a comprehensive snapshot of business activity. Readings above 50 signal expansion, positively impacting the Euro (EUR), while those below 50 indicate contraction, suggesting a bearish outlook for the EUR. This monthly indicator not only reflects current business conditions but also aids in forecasting broader economic trends, including GDP, industrial production, and inflation, underscoring its significance to investors and policymakers alike.

In March 2024, the HCOB Germany Manufacturing PMI saw a decline to 41.6 from February's 42.5, falling short of the anticipated 43.1 according to preliminary estimates, marking the sharpest downturn in the sector in five months. Despite a marginal slowdown in the pace of output reduction, the sector faced significant challenges, notably a steep drop in backlogs which led to further job cuts in factories. On a brighter note, the decrease in manufacturing purchase prices moderated to its slowest rate in a year, and there was a more pronounced decline in factory gate charges. Additionally, after a temporary dip in February, optimism within the manufacturing sector rebounded, signaling a potential shift towards a more positive outlook.

TL;DR

Aspect	Details
Manufacturing PMI	Declined to 41.6 from February's 42.5, falling short of anticipated 43.1 according to preliminary estimates, marking the sharpest downturn in the sector in five months
Challenges	Significant challenges faced, notably a steep drop in backlogs leading to further job cuts in factories
Output and Prices	Marginal slowdown in pace of output reduction, decrease in manufacturing purchase prices moderated to its slowest rate in a year, more pronounced decline in factory gate charges
Future Outlook	After a temporary dip in February, optimism within the manufacturing sector rebounded, signaling a potential shift towards a more positive outlook

The forecast for the HCOB Manufacturing PMI suggests a figure of 41.6, showing a decline from the previous reading of 42.5.

The upcoming release of the HCOB Manufacturing PMI is scheduled for Tuesday at 7:55 AM GMT.

EUR - Consumer Price Index y/y​

The German Consumer Price Index (CPI), compiled monthly by Destatis, serves as a critical gauge of inflation by tracking the average price shift for a broad array of goods and services consumed by households. The Year-over-Year (YoY) comparison, which assesses price changes against the same month in the previous year, plays a pivotal role in understanding inflationary trends and shifts in consumer behavior, with significant implications for the Euro (EUR); higher readings typically bolster the EUR, while lower figures can dampen its value. The CPI basket is heavily weighted towards Housing, water, electricity, gas, and other fuels, which constitute 32% of the total, followed by Transport (13%), Recreation, entertainment, and culture (11%), and Food & non-alcoholic beverages (10%). Other notable categories include Miscellaneous goods & services, Furniture and household items, Restaurant & accommodation services, Health, and Clothing & footwear, together making up 27% of the index, with the final 7% comprising Alcoholic beverages & tobacco, Communication, and Education.

In February 2024, Germany's inflation rate experienced a notable decline, settling at +2.5% year-on-year, the lowest since June 2021 and a marked decrease from the +2.9% recorded in January and +3.7% in December 2023. According to Ruth Brand, President of the Federal Statistical Office, this slowdown was attributed to falling energy product prices, which dropped by 2.4% compared to the same month the previous year, despite the cessation of energy price brakes and the introduction of a higher carbon tax. Additionally, the increase in food prices significantly slowed to just +0.9%, with notable declines in the costs of fresh vegetables and dairy products. While goods prices saw a below-average rise of 1.8%, service prices went up by 3.4%, influenced by various factors including the "Germany ticket" for public transport, which led to cheaper combined tickets for rail and bus. This period also witnessed the first month-on-month job growth in manufacturing in the last four months, signaling potential optimism in the economic climate.

TL;DR

Aspect	Details
Inflation Rate	Experienced a notable decline, settling at +2.5% year-on-year, the lowest since June 2021, marked decrease from +2.9% in January and +3.7% in December 2023
Contributing Factors	Falling energy product prices (-2.4% compared to the previous year), slowdown in food price increase to +0.9%, significant declines in fresh vegetables and dairy product costs
Goods and Service Prices	Goods prices rose below average at 1.8%, service prices increased by 3.4%, influenced by factors including the "Germany ticket" for public transport
Job Growth in Manufacturing	First month-on-month job growth in manufacturing in the last four months, signaling potential optimism in the economic climate

The projection for the German CPI y/y is anticipated to be 2.4%, slightly lower than the previous figure of 2.5%.

The upcoming release of the German CPI y/y is set for Tuesday at 12:00 PM GMT.

EUR - German Prelim CPI m/m​

The German Preliminary Consumer Price Index (CPI) serves as a crucial measure of the change in prices for goods and services bought by consumers each month. Announced toward each month's end, this index is presented in two phases, with the Preliminary version being the initial one, released about 15 days before the final version. This initial release is particularly significant for financial markets as it provides an early glimpse into consumer inflation within the Eurozone, making it a key indicator for traders and financial analysts. Since consumer prices make up a significant portion of overall inflation, this data is closely monitored as it can influence the decisions of central banks. Typically, an increase in inflation can lead to higher interest rates, affecting the value of the currency by making it more appealing to investors seeking higher returns.

In February 2024, Germany's inflation rate was recorded at 2.5%, reaching its lowest point since June 2021. Consumer prices saw a 0.4% increase from January 2024, based on provisional data from the Federal Statistical Office (Destatis). Energy prices fell by 2.4% year-over-year, even as the energy price brake concluded and a higher carbon price on fossil fuels was introduced. Food price inflation also decelerated to 0.9%, falling below the overall inflation rate for the first time since November 2021. The core inflation rate, which excludes food and energy, was at 3.4%. Furthermore, the harmonized index of consumer prices (HICP), which omits certain items like owner-occupied housing costs, showed a 2.7% increase year-over-year and a 0.6% rise from the previous month. These statistics underscore the subtle distinctions between the CPI and HICP in capturing inflation, highlighting varied effects across different product groups and consumer spending.

TL;DR

Aspect	Details
Overall Inflation Rate	Recorded at 2.5%, reaching its lowest point since June 2021
Month-on-Month Change	Consumer prices increased by 0.4% from January 2024
Energy Prices	Fell by 2.4% year-over-year despite the conclusion of the energy price brake and introduction of a higher carbon price on fossil fuels
Food Price Inflation	Decelerated to 0.9%, falling below the overall inflation rate for the first time since November 2021
Core Inflation Rate	Excluding food and energy, stood at 3.4%
Harmonised Index of Consumer Prices (HICP)	Showed a 2.7% increase year-over-year and a 0.6% rise from the previous month, excluding certain items like owner-occupied housing costs
Differences Between CPI and HICP	Highlighted the varied effects across different product groups and consumer spending, underscoring subtle distinctions in capturing inflation

The forecast for the German Preliminary CPI m/m indicates a decrease to 2.2% from the previous rate of 2.5%.

The German Preliminary CPI m/m is set to take place on Tuesday at 12:00 PM GMT.

USD - JOLTS Job Openings​

The JOLTS Job Openings report is a key labor market indicator that measures the number of job vacancies in the United States during a given month, with the exception of the farming industry. This report is issued monthly, approximately 35 days after the end of the reported month. Despite its relatively late release, the JOLTS data is highly regarded by economists and traders alike because job openings serve as a leading indicator of overall employment health. A high number of job openings typically signals a robust labor market, which can influence consumer spending and overall economic growth, thereby potentially impacting monetary policy decisions and market sentiment.

In January, US job openings slightly declined to 8.86 million from a revised figure of 8.89 million, showcasing continued robustness in the labor market, as reported by the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). This minor reduction in job vacancies, along with marginal decreases in hiring and layoffs, underscores the persistent strong demand for workers. The JOLTS report, which also incorporated annual adjustments going back to January 2019, revealed that job openings for 2023 were slightly revised down but have stabilized around the present level for the past three months. While certain sectors like trade, transportation, retail, and government saw a decline in openings, areas such as leisure and hospitality, professional and business services, and health care experienced growth. The labor market's resilience is further highlighted by the existence of more than one job for every individual seeking employment in the US, with the ratio of job openings to unemployed persons maintaining a steady rate of around 1.4. Furthermore, the number of individuals voluntarily leaving their jobs dropped to a three-year low, reflecting a cautious stance among workers about switching jobs in a gradually cooling labor market. According to analysts at a leading financial news service, the continuous softening in labor demand coupled with workers' inclination to remain in their current positions could lead to diminished wage pressures, potentially impacting the Federal Reserve's approach to interest rates. The Fed, which has been wary of ongoing inflation, has shown reluctance to reduce interest rates, a sentiment echoed by Chair Jerome Powell during his testimony. In a related development, a report from the ADP Research Institute indicated a modest uptick in hiring by private-sector employers across various industries, regions, and company sizes. Nevertheless, the accuracy of JOLTS data has been scrutinized by some economists due to its low response rate.

TL;DR

Aspect	Details
Job Openings	Slightly declined to 8.86 million from a revised figure of 8.89 million, showcasing continued robustness in the labor market
Hiring and Layoffs	Marginal decreases alongside the minor reduction in job vacancies, underscoring persistent strong demand for workers
Sectoral Trends	Certain sectors saw a decline in openings, while others experienced growth
Job Openings to Unemployed Persons Ratio	Maintained around 1.4, indicating more than one job for every individual seeking employment
Worker Mobility	Number of individuals voluntarily leaving their jobs dropped to a three-year low, reflecting cautious stance about switching jobs in a gradually cooling labor market
Impact on Wage Pressures	Softening in labor demand coupled with workers' inclination to remain in current positions could lead to diminished wage pressures, potentially impacting Federal Reserve's approach to interest rates
ADP Research Institute Report	Indicated a modest uptick in hiring by private-sector employers
Scrutiny of JOLTS Data	Some economists scrutinize the accuracy of JOLTS data due to its low response rate

The projection for JOLTS Job Openings suggests a slight decrease to 8.81 million from the previous figure of 8.863 million.

The next JOLTS Job Openings is scheduled for release on Tuesday at 2:00 PM GMT.

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

Daily News Update​

​

03 April 2024​

Wednesday​

This Wednesday is shaping up to be a significant day for financial markets, with several key economic indicators scheduled for release. Among the noteworthy announcements, the US is set to reveal its ADP Non-Farm Employment Change and ISM Services PMI, both highly anticipated for their potential impact on market sentiment and monetary policy decisions. Additionally, China will be publishing its Caixin Services PMI, offering insights into the services sector's health in the world's second-largest economy. Meanwhile, Eurostat is expected to unveil the Eurozone's Core CPI Flash Estimate year-over-year and CPI Flash Estimate year-over-year, providing fresh data on inflation trends within the bloc. Overall, Wednesday's announcements are crucial to offer critical insights into global economic conditions, with a particular focus on the influential US labor and services sector data.​

CNY - Caixin Services PMI​

The Caixin Services PMI is a critical economic indicator that reflects the activity level within China's services sector, based on a survey of approximately 400 purchasing managers. These managers provide their insights on various business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. The index is released monthly, on the third business day following the end of the month, with a reading above 50 indicating sector expansion and below 50 signaling contraction. Notably, the report comes in two versions: the Flash and the Final, released about a week apart. The Flash PMI, introduced in November 2019, is the preliminary reading and tends to have a more significant market impact due to its timeliness. It's important for traders because it acts as a leading indicator of economic health, offering insights into how businesses are responding to current market conditions and their outlook on the economy. The 'Previous' value listed in the report refers to the 'Actual' figure from the Flash release, which might cause the historical data to appear disjointed due to the two-phase nature of the report's publication.

In February 2024, the Caixin China General Services PMI indicated a modest increase in business activity in China's service sector, marking a continued expansion for the 14th consecutive month, albeit at a slightly reduced pace from previous months. The index, which fell marginally to 52.5 from 52.7, reflected a tempered growth momentum, with a slight dip in new work and a reduction in staff numbers for the first time since November. Despite a solid rise in new orders from abroad, the highest since June 2023, domestic demand appeared more subdued, leading to a contraction in employment and a decrease in backlogs of work for the first time since July 2022. Input costs rose due to higher raw material and energy prices, leading to a mild increase in output prices. Business confidence also waned, reaching a four-month low, as companies remained cautious amid subdued market conditions and tempered expectations for client spending.

TL;DR

Aspect	Details
Period Covered	February 2024
Index Reading	52.5 (down from 52.7)
Overall Trend	Modest increase in business activity, marking 14th consecutive month of expansion, but pace has slowed.
New Work	Slight dip in new work
Staff Numbers	Reduction in staff numbers for the first time since November
New Orders from Abroad	Solid rise, highest since June 2023
Domestic Demand	More subdued, contributing to employment contraction and decreased backlogs of work for the first time since July 2022
Input Costs	Rose due to higher raw material and energy prices
Output Prices	Mild increase
Business Confidence	Waned, reaching a four-month low due to cautiousness amid subdued market conditions and tempered expectations for client spending

The forecast for Caixin Services PMI is set at 52, slightly lower than the previous figure of 52.5.

The upcoming release of the Caixin Services PMI is set for Wednesday at 1:45 AM GMT.

EUR - Core CPI Flash Estimate y/y​

The Core CPI Flash Estimate y/y, released by Eurostat, is a key economic indicator that measures the yearly change in consumer goods and services prices within the Eurozone, excluding volatile items such as food, energy, alcohol, and tobacco. This estimate is disseminated monthly on the last business day, drawing on early CPI data from 13 euro area member states. The reporting sequence comprises two iterations: the initial Flash release and the subsequent Final version, with the former typically having a greater market impact since its inception in April 2013. Traders prioritize this data because it sheds light on underlying inflation trends, excluding the most erratic components. Inflation plays a critical role in currency valuation, as rising consumer prices may prompt the central bank to hike interest rates in adherence to their inflation control mandate, thereby affecting the Euro's value on the global stage.

In February, the Core CPI Flash Estimate year-over-year in the Eurozone was reported at 3.1%, exceeding the anticipated 2.9%. This figure strips out the volatile elements of energy, food, alcohol, and tobacco. Despite the overall easing of inflation to 2.6% in the region, the core inflation rate remained stubbornly high, surpassing expectations and reflecting persistent price pressures in sectors excluding those with more fluctuating costs. This higher-than-expected core inflation presents a complex scenario for policymakers, particularly as it remains above the 3% mark, complicating the European Central Bank's decision-making amidst efforts to steer inflation towards its 2% target.

TL;DR

Aspect	Details
Period	February
Core CPI Flash Estimate	3.1% year-over-year
Expected Rate	2.9%
Components Excluded	Energy, food, alcohol, and tobacco
Overall Inflation Rate	Eased to 2.6% in the Eurozone
Implication	High core inflation indicates persistent price pressures in non-volatile sectors, challenging policy decisions.
Context for Policymakers	The core inflation rate remains stubbornly above 3%, complicating the ECB's efforts to achieve a 2% inflation target.

The forecast for Core CPI Flash Estimate y/y is anticipated to be 3%, a decrease from the previous figure of 3.1%.

The next Core CPI Flash Estimate y/y is scheduled for release on Wednesday at 9:00 AM GMT.

EUR - CPI Flash Estimate y/y​

The CPI Flash Estimate y/y, issued by Eurostat, is an essential indicator that tracks the annual change in the cost of consumer goods and services in the Eurozone. This estimate is released on the last business day of each month and incorporates energy prices alongside early CPI data from 13 euro area member states. The data dissemination includes a preliminary Flash release followed by a Final version approximately two weeks later. Due to its promptness, the Flash report significantly influences market dynamics. Traders closely monitor this indicator as it provides a comprehensive view of overall inflation, which is crucial for currency valuation. Higher inflation rates can prompt the central bank to increase interest rates to fulfill their mandate of maintaining price stability, thereby impacting the valuation of the Euro in the foreign exchange markets.

In February, the Eurozone's Consumer Price Index (CPI) Flash Estimate revealed a year-over-year inflation rate of 2.6%, slightly higher than the anticipated 2.5%, according to recent figures. This slight ease in the overall inflation, down from January's 2.8%, was overshadowed by the persistence of core inflation, which excludes volatile items such as energy, food, alcohol, and tobacco, and stood at 3.1%—surpassing the expected 2.9%. Despite some signs of cooling, particularly in major economies like Germany, France, and Spain, core inflation remaining above the 3% mark presents a challenge for the European Central Bank (ECB) as it navigates towards its 2% inflation target amidst ongoing economic stagnation in the Eurozone. This scenario has left investors and policymakers in a state of anticipation, especially regarding the potential adjustments in interest rates, with current market predictions leaning towards a cut in June, contingent on the outcome of spring wage negotiations and their impact on domestic inflationary pressures.

TL;DR

Aspect	Details
Period	February
CPI Flash Estimate	2.6% year-over-year
Expected Inflation Rate	2.5%
Previous Rate (January)	2.8%
Core Inflation Rate	3.1%, exceeding the anticipated 2.9%
Excluded Components	Energy, food, alcohol, and tobacco
Significance	Despite a slight ease in overall inflation, the persistence of core inflation above 3% poses a challenge to the ECB
Economic Context	The high core inflation occurs amidst signs of cooling in major economies and ongoing economic stagnation in the Eurozone
Investor and Policymaker Reaction	Anticipation around ECB's rate decisions, with market predictions leaning towards a potential interest rate cut in June
Factors Influencing Future Decisions	Spring wage negotiations and their impact on domestic inflationary pressures are key to future monetary policy adjustments

The forecast for CPI Flash Estimate y/y is projected at 2.5%, slightly below the previous rate of 2.6%.

The next CPI Flash Estimate y/y is set to be released on Wednesday at 9:00 AM GMT.

USD - ADP Non-Farm Employment Change​

The ADP Non-Farm Employment Change is a monthly employment report that estimates the change in the number of employed people in the U.S., excluding workers in the farming industry and government. Typically released on the first Wednesday following the month's end, this data offers an early glimpse into employment trends, often coming out two days before the official government employment statistics. The ADP report's methodology has undergone revisions in February 2007, December 2008, and November 2012 to enhance its alignment with the government's figures. Traders and economists value this report as job creation is a critical leading indicator of consumer spending, which significantly drives overall economic activity. The analysis is based on payroll data from over 25 million U.S. workers, making it a substantial indicator of employment health and economic momentum.

In a significant update on the U.S. labor market, the February ADP National Employment Report, a collaborative effort with the Stanford Digital Economy Lab, revealed the addition of 140,000 jobs in the private sector and a notable 5.1% increase in annual pay from the previous year. The report, which analyzes anonymized payroll data from over 25 million workers, indicated robust growth in the service sector, which contributed 110,000 of the new jobs. A standout finding was the 7.6% rise in pay for individuals changing jobs, a figure that hadn't been seen in over a year. The construction and leisure/hospitality sectors, in particular, experienced substantial job growth, with workers in the latter enjoying some of the highest pay increases. This data paints a picture of a lively and evolving labor market, potentially impacting the Federal Reserve's approach to rate decisions amidst ongoing economic adjustments.

TL;DR

Aspect	Details
Report	February ADP National Employment Report
Collaboration	With the Stanford Digital Economy Lab
Job Additions	140,000 jobs in the private sector
Annual Pay Increase	5.1% from the previous year
Data Source	Anonymized payroll data from over 25 million workers
Service Sector Growth	110,000 new jobs, indicating robust growth
Pay Increase for Job Changers	7.6%, the highest in over a year
Sectors with Significant Growth	Construction and leisure/hospitality
Implication for Federal Reserve	The lively labor market conditions might influence the Federal Reserve's approach to interest rate decisions

The upcoming ADP Non-Farm Employment Change is scheduled for release on Wednesday at 12:15 PM GMT.

The ADP Non-Farm Employment Change is anticipated to rise to 150,000, up from the prior reading of 140,000.

The last time, the US ADP Non-Farm Employment Change was announced on the 6th of March, 2024. You may find the market reaction chart (USOil M5) below:

USD - Final Services PMI​

The Final Services PMI is a key economic indicator that measures the activity level in the services sector, based on a survey of around 400 purchasing managers. These managers provide their insights on various business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. A PMI reading above 50 indicates expansion within the sector, while a reading below 50 suggests contraction. The data is released in two stages, with the Flash release coming out first and typically having a more significant impact due to its timeliness, followed by the Final release about a week later. Since its inception in December 2013, this index has been closely monitored by traders and economists as it serves as a leading indicator of economic health, reflecting the immediate responses of businesses to changing market conditions and providing valuable insights into the overall economic outlook.

In March 2024, the S&P Global US Services PMI declined to a three-month low of 51.7, slipping from February's 52.3 and falling slightly below forecasts of 52. This dip in the PMI signaled a loss of momentum in the service sector, with softer growth observed in new business and a decline in new business from abroad. However, employment increased amidst these challenges. Inflationary pressures heightened, attributed to rising wages, while business confidence saw improvement, correlating with planned marketing activities. Conversely, in February, the final S&P Global US Services PMI indicated a business activity index of 52.3, slightly down from January's 52.5 but surpassing the earlier estimate of 51.3. This marked the thirteenth consecutive month of expansion in business activity, supported by rising new business inflows and sustained sales volumes. Despite some moderation in growth, especially in export orders, the overall expansion remained robust, with easing cost pressures noted alongside a slight uptick in selling price inflation. Employment growth remained modest, reflecting subdued job creation amid ongoing cost-cutting initiatives and labor shortages.

TL;DR

Aspect	March 2024 Details	February 2024 Details
S&P Global US Services PMI	Declined to 51.7, a three-month low	Final PMI at 52.3, down from January's 52.5 but above the preliminary estimate of 51.3
Performance Compared to Forecasts	Below forecasts of 52	-
New Business Growth	Softer growth in new business	Rising new business inflows contributing to expansion
International Business	Decline in new business from abroad	Moderation in growth of export orders
Employment	Increased, despite other challenges	Modest growth, with subdued job creation due to cost-cutting and labor shortages
Inflationary Pressures	Heightened due to rising wages	Easing cost pressures noted, with a slight increase in selling price inflation
Business Confidence	Improved, linked to planned marketing activities	-
General Business Activity Trend	Loss of momentum in the service sector, with the index signaling softer expansion	Thirteenth consecutive month of expansion in business activity, supported by sustained sales volumes despite some growth moderation

The Forecast for Final Services PMI holds steady at 51.7, matching the previous outcome.

The forthcoming Final Services PMI is scheduled for release on Wednesday at 1:45 PM GMT.

USD - ISM Services PMI​

The ISM Services PMI, also known as the Non-Manufacturing PMI or Non-Manufacturing ISM Report On Business, is a significant economic indicator that gauges the activity level in the services sector, excluding manufacturing. This index is derived from a survey of approximately 300 purchasing managers who assess various business conditions such as employment, production, new orders, prices, supplier deliveries, and inventories. Released monthly on the third business day following the month's end, a PMI reading above 50 denotes industry expansion, whereas a reading below 50 indicates contraction. Traders and economists highly value the ISM Services PMI as a leading indicator of economic health, as it reflects the immediate responses of businesses to changing market dynamics, offering a current and relevant perspective on the economic outlook from those at the forefront of business operations.

In February 2024, the Services PMI showed a slight decline to 52.6, maintaining the services sector's expansion for the 14th consecutive month but at a slightly slower pace compared to January's 53.4. The report, released by Anthony Nieves, Chair of the ISM Services Business Survey Committee, indicated sustained growth within the sector, with 44 out of the last 45 months showing growth. Key indices revealed a mixed performance: while the Business Activity and New Orders indices increased, indicating robust activity and continued demand, the Employment and Supplier Deliveries indices contracted, suggesting challenges in employment and faster supplier deliveries after a month of expansion. Price pressures eased, as reflected in the Prices Index, but concerns about inflation, employment, and geopolitical conflicts remain. Despite these challenges, respondents generally remained optimistic about business conditions, highlighting the sector's resilience and ongoing growth amid a nuanced landscape.

TL;DR

Aspect	Details
Period	February 2024
Services PMI	52.6 (down from January's 53.4)
Trend	Expansion in services sector for the 14th consecutive month, albeit at a slower pace
Historical Growth	Growth in 44 out of the last 45 months
Business Activity	Increased, indicating robust sector activity
New Orders	Increased, showing continued demand
Employment	Contracted, pointing to employment challenges
Supplier Deliveries	Faster, suggesting a month of contraction after a period of expansion
Price Pressures	Eased, as per the Prices Index
Challenges	Inflation, employment challenges, and geopolitical conflicts
Business Outlook	Generally optimistic despite challenges, highlighting the sector's resilience and capacity for continued growth

The expected ISM Services PMI is projected at 52.5, marginally lower than the previous reading of 52.6.

The next ISM Services PMI is scheduled for release on Wednesday at 2:00 PM GMT.

The last time, the US ISM Services PMI was announced on the 5th of March, 2024. You may find the market reaction chart (GBPUSD M5) below:

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Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.

 

[Daniel LQDFX]

4th April 2024

Thursday​

This Thursday, the financial markets are poised for a day of high-impact economic disclosures, with the spotlight on Switzerland's Consumer Price Index (CPI) data, presented in both month-over-month and year-over-year formats, and the United States' Unemployment Claims figures. These announcements are expected to play a crucial role in shaping global economic trends, capturing the attention of investors and policymakers worldwide. Adding depth to the day's economic narrative, medium-impact news releases are also scheduled, including the Spanish, Italian, French, and German Final Services Purchasing Managers' Index (PMI) reports, along with the HCOB Eurozone Services PMI and Great Britain's Final Services PMI. These reports will offer additional insights into the services sector's performance across key European economies, further informing market sentiments and strategic decision-making.

CHF – CPI y/y​

The Swiss Consumer Price Index (CPI), issued monthly by the Swiss Federal Statistical Office, is a key measure reflecting the variation in prices for a range of goods and services indicative of household consumption in Switzerland, and it plays a crucial role in assessing inflation and consumer behavior changes. The CPI's year-over-year analysis impacts the valuation of the Swiss Franc, with higher figures generally boosting its strength. The index's composition highlights Housing & Energy as its most significant segment at 27%, followed by Healthcare (17%), Food & Non-alcoholic Beverages (13%), and Transport (11%), among others, offering a detailed snapshot of where consumer spending is most concentrated.

Switzerland's annual inflation rate slightly decreased to 1.2% in February 2024, marking the lowest level since October 2021, despite slightly surpassing expectations of 1.1%. This modest decline from January's 1.3% was primarily influenced by a reduction in the growth rate of food and non-alcoholic beverage prices, which rose by only 0.8% compared to 2.3% in the previous month. Other sectors also saw subdued price increases, including restaurants & hotels, recreation & culture, other goods & services, and alcoholic beverages & tobacco. Notably, costs for transport, healthcare, and household goods & services experienced declines. However, inflation rates for housing & energy and clothing & footwear witnessed slight upticks. The monthly CPI also rose by 0.6% in February, a noticeable increase from January's 0.2% growth. Meanwhile, the core inflation rate, which excludes volatile items like unprocessed food and energy, saw a minor decrease to 1.1% from 1.2%.

TL;DR

Category	Inflation Rate or Price Growth (February 2024)
Overall Inflation Rate	1.2% (Decreased from January's 1.3%)
Food and Non-Alcoholic Beverages	0.8% (Down from 2.3% in the previous month)
Restaurants & Hotels	Subdued price increases
Recreation & Culture	Subdued price increases
Other Goods & Services	Subdued price increases
Alcoholic Beverages & Tobacco	Subdued price increases
Transport	Decline in costs
Healthcare	Decline in costs
Household Goods & Services	Decline in costs
Housing & Energy	Slight uptick in costs
Clothing & Footwear	Slight uptick in costs
Monthly CPI Change	0.6% (Up from January's 0.2%)
Core Inflation Rate	1.1% (Down from 1.2%)

The CPI y/y is showing a 1.4% projection, up from the previous outcome of 1.2%.

The forthcoming CPI y/y data is set to be unveiled on Thursday at 6:30 AM GMT.

CHF - CPI m/m​

The Consumer Price Index (CPI) m/m is a crucial economic indicator that measures the monthly change in the price of goods and services purchased by consumers. It is typically released about three days after the month ends, making it one of the earliest major inflation data points available from any country. The CPI calculation involves sampling the average prices of various goods and services and comparing them to the prices from the previous sampling period. Traders pay close attention to this indicator because consumer prices constitute a significant portion of overall inflation, which plays a vital role in currency valuation. Rising inflation often prompts central banks to increase interest rates as part of their mandate to contain inflation, which in turn can have significant implications for currency markets and economic strategies.

The recent announcement from the Federal Statistical Office (FSO) revealed a significant 0.6% increase in the Consumer Price Index (CPI) for February 2024, reaching 107.1 points based on the December 2020 benchmark. This rise reflected various factors shaping the economic landscape. The month-on-month surge in inflation was driven primarily by rising housing rental costs and airfare prices, signaling a sectoral rebound. Additionally, supplementary accommodation and international package holidays saw price increases, indicating a revival in the travel and tourism industry. Conversely, certain consumer goods, like berries and beef, experienced price declines, alongside reduced expenses for face care and make-up products. This diversity in price trends underscored the complex dynamics of market forces and consumer behavior. Year-over-year, the inflation rate stood at 1.2%, indicating a cautious yet steady economic recovery. The FSO's latest data offered valuable insights into economic conditions, providing a nuanced understanding of the factors influencing consumer prices and broader inflation trends.

TL;DR

Category	Details (February 2024)
Consumer Price Index (CPI)	0.6% increase, reaching 107.1 points
Benchmark	Based on December 2020
Primary Drivers of CPI Increase	Rising housing rental costs and airfare prices
Other Notable Increases	Supplementary accommodation and international package holidays prices
Declines in Consumer Goods Prices	Berries and beef
Reduced Expenses	Face care and make-up products
Year-over-Year Inflation Rate	1.2%
Economic Implication	Indicates a cautious yet steady economic recovery
Analysis Source	Federal Statistical Office (FSO)

The forecast for CPI m/m stands at 0.3%, a decrease from the previous outcome of 0.6%.

The upcoming CPI m/m is scheduled for release on Thursday at 6:30 AM GMT.

EUR - Spanish Services PMI​

The S&P Global Spain Services PMI, which reflects the health of the Spanish service sector, is derived from surveys conducted among a diverse group of more than 300 firms within the industry. This index monitors key aspects such as sales, employment, inventory levels, and pricing. An index value above 50 signifies expansion within the services sector, while a value below 50 suggests a contraction.

In February 2024, the S&P Global Spain Services PMI climbed to 54.7 from 52.1 in January, surpassing expectations of 53.5 and marking the strongest expansion since May 2023 during its sixth consecutive period of growth, driven by improved market conditions. The surge was fueled by the highest increase in activity and new business in nine months, primarily supported by robust domestic demand, despite a continued decline in export orders. The sector's expansion led firms to increase their workforce significantly, which in turn elevated salary costs and overall operating expenses, propelling input costs inflation to a nine-month peak and pushing output charges to the highest level in a year. Optimism for the future also intensified, with confidence reaching a two-year high, buoyed by expectations of demand recovery and the initiation of new projects anticipated to further stimulate sales.

TL;DR

Category	Details (February 2024)
S&P Global Spain Services PMI	Climbed to 54.7 from 52.1 in January
Expectations	Surpassed the anticipated 53.5
Expansion Period	Strongest since May 2023, marking the sixth consecutive period of growth
Main Growth Drivers	Highest increase in activity and new business in nine months
Domestic Demand	Robust, supporting the growth
Export Orders	Continued decline
Workforce Impact	Significant increase in workforce by firms
Costs	Elevated salary costs and overall operating expenses
Input Costs Inflation	Reached a nine-month peak
Output Charges	Highest level in a year
Future Outlook	Optimism reached a two-year high, driven by expectations of demand recovery and new projects

The forecast for the Spanish Services PMI is set at 54.7, maintaining the same level as the prior reading.

The next release of the Spanish Services PMI is set for Thursday, at 7:15 AM GMT.

EUR - Italian Services PMI​

The Italian Services PMI, a key indicator derived from a survey of around 400 purchasing managers in the services sector, is released on the third business day of each month. It reflects the sector's health by measuring business conditions like employment, production, and new orders, with a score above 50 indicating expansion. This index is closely watched by traders and investors as it provides timely insights into economic health, making it a critical tool for gauging market conditions and economic trends.

In February 2024, the HCOB Italy Services PMI experienced a notable rise to 52.2, up from 51.2 the previous month, aligning closely with market forecasts of 52.3 and signaling continued expansion for the second consecutive month. This uplift underscores a progressive recovery within Italy's service sector, attributed largely to the introduction of new clients and an upturn in demand. The period saw new orders escalating at their quickest rate in nine months, predominantly fueled by domestic transactions, while new export sales found stable ground following a six-month downturn. Responding to the increasing volume of orders, service providers expanded their workforce for the fourth consecutive period, doing so at a notably faster pace. Despite this positive momentum, inflationary pressures persisted, with businesses reporting a sharper increase in output charges. Optimism for the sector's future ascended to its highest point since April 2022, though it remains below the long-term average, reflecting cautious confidence among service providers.

TL;DR

Category	Details (February 2024)
HCOB Italy Services PMI	Rose to 52.2 from 51.2 in January
Market Forecasts	Close to the forecast of 52.3
Expansion Duration	Continued expansion for the second consecutive month
Recovery Indicators	New clients and an upturn in demand
New Orders	Quickest rate of increase in nine months, driven by domestic transactions
New Export Sales	Stabilized after a six-month decline
Workforce Expansion	Fourth consecutive period of expansion, at an accelerated pace
Inflationary Pressures	Sharper increase in output charges
Sector Optimism	Highest since April 2022, though below the long-term average

The anticipated Italian Services PMI is set at 53.2, marking an improvement from the previous figure of 52.2.

The next release of the Italian Services PMI is set for Thursday, at 7:45 AM GMT

EUR - French Final Services PMI​

The HCOB France Services PMI is produced by S&P Global through surveys sent to about 400 companies in the service sector, covering areas such as consumer services (excluding retail), transportation, information and communication, finance, insurance, real estate, and business services. The principal metric, the Services Business Activity Index, operates as a diffusion index, formulated from responses on the change in business activity volume month-over-month. Comparable to the Manufacturing Output Index, this index spans from 0 to 100, where readings above 50 signify a month-over-month increase in activity, and those below 50 indicate a decrease.

In March 2024, the HCOB France Services PMI witnessed a decrease to 47.8, falling short of expectations and marking the 10th consecutive month of sector contraction, as intensified client caution, tough economic circumstances, and inflationary pressures led to sharper declines in activity and sales; despite these challenges, employment saw growth, easing backlogs of work, while input price inflation moderated to a 31-month low, primarily driven by rising wage costs, even as output price growth slowed. Norman Liebke, an economist at Hamburg Commercial Bank, commented on the delay in the French economy's recovery, projecting it to extend into the second quarter or beyond, yet highlighted a notable surge in services sector confidence, underpinned by optimistic expectations for future economic conditions.

TL;DR

Category	Details (March 2024)
HCOB France Services PMI	Decreased to 47.8
Sector Trend	10th consecutive month of contraction
Main Challenges	Client caution, tough economic conditions, inflationary pressures
Activity and Sales	Sharper declines
Employment	Saw growth, easing backlogs of work
Input Price Inflation	Moderated to a 31-month low, primarily due to rising wage costs
Output Price Growth	Slowed
Economist's Commentary	Norman Liebke highlighted delayed recovery, projecting extension into Q2 or beyond, but noted surge in services sector confidence driven by optimistic future economic expectations

The predicted French Final Services PMI remains steady at 47.8, mirroring the previous figure.

The next release of the French Final Services PMI is set for Thursday, at 7:50 AM GMT.

EUR - German Final Services PMI​

The HCOB Germany Services PMI, a critical monthly indicator produced by S&P Global based on responses from approximately 400 service sector companies, including those in consumer services (excluding retail), transport, information, communication, finance, insurance, real estate, and business services, employs a diffusion index methodology to gauge business activity. The headline Services Business Activity Index, akin to the Manufacturing Output Index, is derived from queries about changes in business activity volume compared to the preceding month, with the index spanning from 0 to 100. Readings above 50 denote sectoral expansion, signifying bullish implications for the Euro (EUR), while those below 50 indicate contraction, suggesting bearish outcomes for EUR, thus providing valuable foresight into evolving economic trends, potentially impacting Gross Domestic Product (GDP), employment, and inflation metrics.

In a recent turn of events, the service sector in Germany showed signs of resilience amid challenging economic conditions. According to the latest figures released for March 2024, the HCOB Germany Services PMI climbed to 49.8, a notable improvement from February's 48.3 and surpassing analysts' forecasts of 48.8. Despite this being the sixth consecutive month of slight contraction, the trend indicates a move towards stabilization in the sector. Companies within the services domain have not shied away from expanding their workforce for the third consecutive month, even as they navigate through a dip in new orders. A silver lining comes in the form of moderated input costs, which have seen less sharp increases than in previous months, though the pressure from ongoing wage hikes remains. Moreover, the rise in output charges has softened, reaching a four-month low. Optimism among service providers has surged, hitting a twelve-month zenith, suggesting a positive outlook that transcends the sector's current challenges.

TL;DR

Category	Details (March 2024)
HCOB Germany Services PMI	Climbed to 49.8 from February's 48.3
Analysts' Forecasts	Surpassed expectations of 48.8
Sector Trend	Sixth consecutive month of slight contraction, yet moving towards stabilization
Workforce Expansion	Continued for the third consecutive month
New Orders	Experienced a dip
Input Costs	Moderated increases, less sharp than previous months
Wage Pressure	Ongoing, contributing to cost pressures
Output Charges	Softened, reaching a four-month low
Sector Optimism	Surged to a twelve-month high, indicating a positive outlook

The projected German Final Services PMI is expected to hold steady at 49.8, unchanged from the previous reading.

The next release of the German Final Services PMI is set for Thursday, at 7:55 AM GMT

EUR - HCOB Eurozone Services PMI​

The HCOB Eurozone Services PMI, developed by S&P Global, aggregates feedback from a diverse panel of service providers across key Eurozone countries including Germany, France, Italy, Spain, and Ireland, spanning sectors such as consumer services (excluding retail), transportation, information and communication, finance, insurance, real estate, and business services. The core metric, the Services Business Activity Index, functions as a diffusion index, constructed from participants' responses regarding month-over-month changes in business activity volume, and mirrors the methodology of the Manufacturing Output Index. This index operates on a 0 to 100 scale, where figures above 50 signal an expansion in service sector activity from the previous month, and those below 50 denote a contraction.

In March 2024, the HCOB Eurozone Services PMI experienced a notable ascent to 51.1 from February's 50.2, surpassing expectations with a projection of 50.5, and registering the most significant growth since June 2023. This upward movement marks a continuation of the sector's recovery, with two consecutive months of growth following half a year of contractions, kindling optimism for a sustained revival in the Eurozone's service industry amidst ongoing tight interest rate policies. For the first time in nine months, service firms reported a rise in new business, though the pace of growth remained modest. However, the rate of employment expansion moderated slightly. In terms of costs, there was a deceleration in the rate of input price increases, reaching an eight-month low, which in turn contributed to a more subdued increase in selling prices, signaling a potential easing of inflationary pressures within the sector.

TL;DR

Category	Details (March 2024)
HCOB Eurozone Services PMI	Rose to 51.1 from February's 50.2
Expectations	Surpassed the forecast of 50.5
Growth Momentum	Strongest since June 2023
Recovery Trend	Continued growth for two consecutive months after six months of contraction
New Business	Increased for the first time in nine months, albeit modestly
Employment Expansion	Rate of growth moderated slightly
Input Costs	Rate of increase decelerated, reaching an eight-month low
Selling Prices	More subdued increase, indicating potential easing of inflationary pressures

The projection for the Final Services PMI remains unchanged, holding steady at 51.1, identical to the previous reading.

The next release of the Final Services PMI is set for Thursday, at 8:00 AM GMT.

GBP – Final Services PMI​

The S&P Global/CIPS UK Services PMI is a critical economic indicator derived from a diffusion index based on surveys from approximately 650 purchasing managers across various service sectors including transportation, communication, financial services, business services, personal services, IT, and hospitality. Released monthly, on the third business day following the month's end, with the next publication slated for May 3, 2024, this index tracks key business variables such as sales, employment, inventories, and prices. Readings above 50 signal expansion within the sector, while those below 50 indicate contraction. As a leading gauge of economic health, the PMI provides valuable insights into market conditions, with actual figures surpassing forecasts typically benefiting the currency. Notably, the index features two versions – Flash and Final – released about a week apart, with the Flash version, introduced in November 2019, often having a more significant market impact due to its timeliness.

In the latest economic update, the S&P Global UK Services PMI for March 2024 dipped to 53.4 from February's 53.8, falling short of the anticipated 53.8 according to preliminary data. This decline marks the most modest expansion in service sector business activity observed in the past three months, a slowdown attributed by many businesses to the tightening of household budgets. Despite the overall deceleration, output growth maintained a strong momentum, marginally below the nine-month peak recorded in February. Challenges persisted on the cost front, with input expenses on the rise due to increasing wage demands and higher shipping costs, pushing inflation rates to near-record highs since August 2023. In response, service providers raised their prices at the fastest pace since July 2023 in an effort to protect their margins. However, the sector's outlook dimmed, as confidence among service providers took a hit amid concerns over the UK's economic trajectory and ongoing political instability.

TL;DR

Category	Details (March 2024)
S&P Global UK Services PMI	Dipped to 53.4 from February's 53.8
Expectations	Fell short of the anticipated 53.8
Business Activity Expansion	Most modest in the past three months
Slowdown Reason	Tightening of household budgets
Output Growth	Strong, slightly below February's nine-month peak
Cost Challenges	Rise in input expenses due to increased wage demands and shipping costs
Inflation Rates	Near-record highs since August 2023
Price Adjustments	Fastest pace of increases since July 2023
Sector Outlook	Confidence declined due to concerns over economic trajectory and political instability

The anticipated Final Services PMI remains consistent at 53.4, mirroring the previous result.

The next release of the Final Services PMI is set for Thursday, at 8:30 AM GMT.