Daily Update - 25th March 2020
The February PMIs showed growth in the services sector, but pointed to contraction in the manufacturing sector. Analysts are braced for very soft readings in March as the COVID-19 outbreak has paralyzed the Euro zone economy. Eurozone PMIs are forecast to come in around 40.0 with the French PMI are projected to fall to around 39.5 points. German services PMI is expected in at 43.0 and the manufacturing PMI at 40.1 points. However, with the CORVID-19 outbreak intensifying, analysts are braced for a contraction in March. The estimate for the initial reading for March stands at 45.7 points. The euro declined on Tuesday as after March purchasing manager index readings that laid bare the extent of the impact of the coronavirus outbreak on euro zone economies. Euro zone business activity crumbled, with IHS Markit’s euro zone composite flash purchasing managers index (PMI) plummeting to a record low of 31.4 from February’s 51.6, far below the 50 level that signals growth and far lower than Reuters poll expectations. Britain’s pound rallied over 1.5% against the dollar on Tuesday, set for its biggest daily jump since October, winning a respite from a battering in recent days in the face of the coronavirus. Sterling, along with most currencies, has seen a massive wave of selling against the U.S. dollar, the world’s most liquid currency and the safe haven of choice when confidence evaporates from financial markets. U.S. government bond yields rose on Tuesday and one measure of the yield curve steepened as investors waited for Congress to vote on a $2 trillion stimulus bill to combat the blow dealt to the U.S. economy by the coronavirus pandemic. The benchmark 10-year yield was up 7 basis points to 0.837%, with the two-year yield up 9.4 basis points to 0.389%. The 30-year long bond yield was last up 4.7 basis points to 1.393%. • Germany IFO Business Climate • GBP: Consumer Price Index • U.S Non-Defense Capital Goods Orders Ex-Air Crafts Manufacturers remain pessimistic about order volumes, as the indicator remains mired in negative territory. In February, there was a slight improvement, with a reading of -18, up from -22 points. However, investors are braced for a sharp downturn in March, with a forecast of -38 points. The February PMIs showed growth in the services sector, but pointed to contraction in the manufacturing sector. Analysts are braced for very soft readings in March as the COVID-19 outbreak has paralyzed the Euro zone economy. Eurozone PMIs are forecast to come in around 40.0 with the French PMI are projected to fall to around 39.5 points. German services PMI is expected in at 43.0 and the manufacturing PMI at 40.1 points. Yesterday’s market:
Today’s markets:
Today’s explained:
