Market Review - 28/02/2014 21:26GMT
[B]Euro rallies on eurozone inflation and downwardly revised U.S. GDP data[/B]
The single currency rallied from 1.3694 to as high as 1.3825 in New York after the release of eurozone inflation data and downwardly revised U.S. economic growth for the fourth quarter.
Eurozone CPI unexpectedly held steady this month as eurozone Feb inflation estimated came in at 0.8% y/y versus economists’ forecast of 0.7%. Euro zone Feb CPI core was 1.0% y/y, higher than previous reading of 0.8%. Euro zone unemployment rate unchanged at 12.0% in January. The inflation cooled expectations the European Central Bank might ease monetary policy as early as next week. The single currency rallied from Asian low at 1.3694 to as high as 1.3825 before retreating briefly in late New York.
The greenback fluctuated wildly against the Japanese yen on Friday. Renewed selling interest at 102.20 ahead of Asian open pressured the pair lower n price dropped to as low as 101.55, weighed down by the decline in the Nikkei futures. However, active short-covering on the rebound in Asian stock markets lifted the pair. Dollar rose strongly to 102.30 in NY after the release of U.S. economic data. Chicago PMI came in at 59.8 in Feb versus 59.6 in Jan whilst U.S. University of Michigan consumer sentiment index final Feb was 81.6 versus prelim. reading of 81.2.
U.S. dollar nose-dived to 101.67 in late New York due to the brief but strong retreat in U.S. stock markets together with rising geopolitical tensions in Ukraine as Ukraine’s acting president accused Russia of open aggression and said Moscow was following a similar scenario to the one before it went to war with Georgia in 2008.
The British pound also fluctuated wildly on Friday. Cable rose from 1.6677 to 1.6769 in tandem with euro after the release of eurozone inflation data, however, profit-taking knocked price lower to 1.6684 before rebounding to 1.6764 in New York.
In other news, Chicago Fed President Charles Evans told an audience of economic heavyweights in New York that ‘the Federal Reserve’s best bet for returning the United States to full employment and 2-percent inflation is to clearly and repeatedly state those goals and even be willing to overshoot them to get there quickly; under Fed Chairman Ben Bernanke, the Fed has used massive bond-buying programs and a promise to keep rates low as effective tools to provide monetary policy accommodation despite having already slashed the main policy rate to near zero.’
[B]Data to be released next week:[/B]
Australia new home sales, China non-manufacturing PMI, HSBC manufacturing PMI, UK hometrack housing survey, house prices, manufacturing PMI, mortgage approvals, Swiss manufacturing PMI, Italy manufacturing PMI, France manufacturing PMI, Germany manufacturing PMI, EU manufacturing PMI, U.S. personal income, personal spending, PCE, manufacturing PMI, ISM manufacturing and construction spending on [B]Monday.[/B]
Australia building approvals, RBA rate decision, EU PPI and U.S. ISM New York on [B]Tuesday. [/B]
Australia GDP, China HSBC services PMI, UK shop price index, Italy services PMI, France services PMI, Germany services PMI, EU services PMI, GDP, U.S. ADP employment, ISM non-manufacturing and Canada BoC rate decision on [B]Wednesday. [/B]
Australia trade balance, retail sales, Germany factory orders, UK BoE rate decision, EU ECB rate decision, Canada building permits, U.S. labor cost, productivity, initial jobless claims and factory orders on [B]Thursday[/B].
Japan leading index, Swiss unemployment rate, CPI, France trade balance, Italy PPI, Germany industrial production, Canada unemployment rate, labor productivity, U.S. non-farm payrolls, private payrolls, unemployment rate and avg. hourly earnings on [B]Friday. [/B]