EUR/USD is almost unchanged in the Friday session, continuing the lack of movement seen on Thursday. Currently, the pair is trading at 1.1376, up 0.05% on the day. There are a host of events on both sides of the pond, so the pair could show stronger activity in the North American session. German retail sales jumped 3.3%, but manufacturing PMI fell to 47.6, matching the forecast. Eurozone CPI Flash Estimate came in at 1.5%, matching the estimate. Core CPI Flash Estimate gained 1.0%, just shy of the forecast of 1.1%. In the U.S., the focus will be on consumer data, highlighted by the Core PCE Price Index and personal spending.
German numbers were a mix on Friday. Retail sales bounced back with a 3.3% gain in January, after a 4.3% decline in December. The manufacturing sector continues to struggle, as Manufacturing PMI fell below the 50-level for a second straight month, pointing to contraction. German and eurozone manufacturing has fallen off due to the global trade war, which has led to less demand for eurozone and German products. On the labor front, unemployment rolls fell by 21 thousand, crushing the estimate of -5 thousand. There was more good news as the eurozone unemployment rate dropped to 7.8% in January, down from 7.9% a month earlier.
The ECB has finally terminated its massive stimulus program, but any speculation that the bank will raise rates in the near term appears remote. The ECB has held rates at a flat 0.00% since March 2016, and there are two main factors weighing on a rate hike. First, the eurozone economy is grappling with a slowdown, and the German locomotive has also posted sluggish numbers. As well, inflation levels remain well shy of the ECB target of 2 percent. Unless the economic conditions show a sharp improvement, we may not see a rate hike before 2020.
The U.S. received a GDP report card on Thursday, and the results were good. Advance GDP, which was released a month late due to the government slowdown, showed a gain of 2.6% in Q4. Although this was weaker than the 3.4% gain in Q3, it was well above the estimate of 2.2%. The unexpectedly solid reading can be credited to strong consumer spending and business investment. It’s hard to argue that the U.S. economy is not performing well, with a strong expansion of 3.1% in 2018. Even with the GDP release, it’s unlikely that the Federal Reserve will veer from it dovish stance.
Friday (March 1)
- 2:00 German Retail Sales. Estimate 1.9%. Actual 3.3%
- 2:45 French Government Budget Balance. Estimate -17.3B
- 3:15 Spanish Manufacturing PMI. Estimate 51.8. Actual 49.9
- 3:45 Italian Manufacturing PMI. Estimate 47.7. Actual 47.1
- 3:50 French Manufacturing PMI. Estimate 51.4. Actual 51.5
- 3:55 German Final Manufacturing PMI. Estimate 47.6. Actual 47.6
- 3:55 German Unemployment Change. Estimate -5K. Actual -21K
- 4:00 Eurozone Final Manufacturing PMI. Estimate 49.2. Actual 49.3
- 4:00 Italian Monthly Unemployment Rate. Estimate 10.4%. Actual 10.5%
- 5:00 Eurozone CPI Flash Estimate. Estimate 1.5%. Actual 1.5%
- 5:00 Eurozone Core CPI Flash Estimate. Estimate 1.1%. Actual 1.0%
- 5:00 Eurozone Unemployment Rate. Estimate 7.9%. Actual 7.8%
- 8:30 US Core PCE Price Index. Estimate 0.2%
- 8:30 US Personal Spending. Estimate -0.2%
- 8:30 (Dec. Data) US Personal Income. Estimate 0.5%
- 8:30 US Personal Income. Estimate 0.3%
- 9:45 US Final Manufacturing PMI. Estimate 53.7
- 10:00 US ISM Manufacturing PMI. Estimate 55.6
- 10:00 US UoM Consumer Sentiment. Estimate 95.8
- 10:00 US ISM Manufacturing Prices. Estimate 51.6
- 10:00 US Revised UoM Inflation Expectations
- All Day – US Total Vehicle Sales. Estimate 16.8M
*All release times are EST
*Key events are in bold
EUR/USD for Friday, March 1, 2019
EUR/USD for March 1 at 5:40 EST
Open: 1.1371 High: 1.1375 Low: 1.1353 Close: 1.1376
EUR/USD was flat in the Asian session and is showing limited movement in European trade
- 1.1300 is providing support
- 1.1434 is the next resistance line
- Current range: 1.1300 to 1.1434
Further levels in both directions:
- Below: 1.1300, 1.1212, 1.1120 and 1.1046
- Above: 1.1434, 1.1553 and 1.1685
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