Daily Update - 21st march 2018
Australian dollar strengthened early morning as the RBA meeting minutes showed that officials were optimistic about the economy of its key trading partners. Euro and Pound came under selling pressure, as the dollar got the market favor while the data released from the European union disappointed the investors. German ZEW Survey indicated that economic sentiment deteriorated in the country in March, probably due to a US-triggered trade war. Pound also failed to make any gains as inflation figures were not up to expectations of the market. The data showed that the country’s inflation reduced to 2.7% caused mostly by the falling petroleum and food prices. The dollar index rose by about 0.40% as traders wait for the decision tomorrow from the Federal Reserve. The key drivers for the gain in the dollar was the euro which fell by 0.50% and yen which gained by 0.20%. Today marks an important day in the FED calendar as they will look at increasing the interest rates for the first time in 2018. Early morning, we will see few major and mid-tier data been released from UK which may prompt BOE to increase their interest rates next time. First up will be Claimant Count which presents the number of unemployed people in the UK. Then comes ILO Unemployment Rate which is the number of unemployed workers divided by the total civilian labor force. This is followed by Average Earnings figures which is a key short-term indicator of how levels of pay are changing within the UK economy. UK data release will come to an end with Public Sector Net Borrowing which captures an amount of new debt held by the U.K. governments. From the European zone we will see 10 Year bond auction from Germany while ECB Monetary policy will take place but meeting minutes will only be released next week, hence won’t create any movement in the market. After last week white house chaos, the markets will be looking forward to a hawkish FED Statement this afternoon. FED is expected to increase the interest rates by 25 basis points. However, the focus will be on economic projections for the quarter which could end up signaling more than the three interest rate hikes which were forecasted in December.Yesterday’s Market
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