IC Markets Europe Fundamental Forecast | 21 March 2024
What happened in the Asia session?
Employment growth in Australia exploded for the month of February as a whopping 116.5K jobs were added versus the estimate of just 40K while the unemployment rate dropped from 4.1% to 3.7%, also lower than its forecast of 4.0%. This robust report functioned as an additional tailwind for the Aussie as it briefly climbed above the 0.6100-threshold – this currency pair should continue to climb higher as the day progresses.
What does it mean for the Europe & US sessions?
The Swiss National Bank (SNB) is expected to maintain its key policy rate on hold at 1.75% for the third consecutive meeting – no surprises here. SNB Governor Thomas Jordan will then deliver his press conference following the release of the monetary policy statement where traders will be watching out for any additional clues. Should he communicate a ‘dovish’ outlook on future monetary policy action, this current downward slide in USD/CHF could slow during the European session as demand for the Swiss franc may pick up slightly.
Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.
The Dollar Index (DXY)
Key news events today
Unemployment Claims (12:30 pm GMT)
Composite PMI (1:45 pm GMT)
What can we expect from DXY today?
Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.
The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar.
Central Bank Notes:
Next 24 Hours Bias
Medium Bearish
Gold (XAU)
Key news events today
Unemployment Claims (12:30 pm GMT)
Composite PMI (1:45 pm GMT)
What can we expect from Gold today?
Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.
The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar. It is bound to be another volatile period for gold prices during the US session.
Next 24 Hours Bias
Medium Bullish
The Australian Dollar (AUD)
Key news events today
Labour Force Report (12:30 am GMT)
What can we expect from AUD today?
Employment growth in Australia exploded for the month of February as a whopping 116.5K jobs were added versus the estimate of just 40K while the unemployment rate dropped from 4.1% to 3.7%, also lower than its forecast of 4.0%. This robust report functioned as an additional tailwind for the Aussie as it briefly climbed above the 0.6100-threshold – this currency pair should continue to climb higher as the day progresses.
Central Bank Notes:
Next 24 Hours Bias
Strong Bullish
The Kiwi Dollar (NZD)
Key news events today
GDP (9:45 pm GMT 20th March)
What can we expect from NZD today?
New Zealand’s economy declined 0.1% QoQ in the fourth-quarter of 2023, missing the estimate of a 0.1% GDP growth. Despite a struggling economy, the Kiwi was lifted following a ‘dovish’ rhetoric by Federal Reserve Chairman Jerome Powell as it hit an overnight high of 0.6085 and is likely to remain elevated today.
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
The Japanese Yen (JPY)
Key news events today
National Core CPI (11:30 pm GMT)
What can we expect from JPY today?
Inflation in Japan, particularly the core CPI, has moderated lower since the third quarter of 2023 easing to a growth rate of 2.0% YoY in January – the lowest level since March 2022. However, February’s estimate of 2.8% hints at a re-acceleration of core inflation which is likely to spur another strong rally in the Japanese yen and potentially drive USD/JPY lower.
Central Bank Notes:
Next 24 Hours Bias
Medium Bearish
The Euro (EUR)
Key news events today
Composite PMI (9:00 am GMT)
What can we expect from EUR today?
The March estimate for the Composite PMI shows overall activity contracting once more in the Eurozone – economic output has been depressed since mid-2023. Should the flash figures print lower than the estimates, this result could cap some of the recent gains seen in the Euro following the outcome of the FOMC meeting overnight.
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
The Swiss Franc (CHF)
Key news events today
SNB Monetary Policy Assessment (8:30 am GMT)
SNB Press Conference (9:00 am GMT)
What can we expect from CHF today?
The Swiss National Bank (SNB) is expected to maintain its key policy rate on hold at 1.75% for the third consecutive meeting – no surprises here. SNB Governor Thomas Jordan will then deliver his press conference following the release of the monetary policy statement where traders will be watching out for any additional clues. Should he communicate a ‘dovish’ outlook on future monetary policy action, this current downward slide in USD/CHF could slow during the European session as demand for the Swiss franc may pick up slightly.
Central Bank Notes:
2024 and 1.6% for 2025.
Next 24 Hours Bias
Medium Bearish
The Pound (GBP)
Key news events today
Composite PMI (9:30 am GMT)
What can we expect from GBP today?
The Composite PMI output returned to expansion in November 2023 as a robust services sector pulled up overall economic activity in the UK. The flash reading for the month of March points to overall activity expanding strongly for the fifth month in a row – this result is likely to provide additional tailwinds for the Pound as GBP/UDS rose above the key threshold of 1.2800 as Asian markets came online.
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
A ‘dovish’ press conference by Federal Reserve Chairman Jerome Powell sent USD/CAD crashing overnight. This currency pair dived from 1.3580 to as low as 1.3470 at the beginning of the Asia session, shedding over 100 pips in the process. Overhead pressures remain and USD/CAD is likely to slide lower as the day progresses.
Central Bank Notes:
Next 24 Hours Bias
Medium Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Following the larger-than-expected drawdown in API stockpiles, the EIA oil inventories also declined strongly as 2.0M barrels of crude were removed from storage – a figure that was double of the estimate of a 0.9M-draw. Although prices for crude oil pulled back yesterday with WTI oil reversing from Tuesday’s high $83.75, this commodity found support around the region of $81.50 per barrel overnight and could edge higher today.
Next 24 Hours Bias
Weak Bullish
The post IC Markets Europe Fundamental Forecast | 21 March 2024 first appeared on IC Markets | Official Blog.