FR Business Survey, German IFO, US Fed Speech

This is one of the emptiest calendar days I’ve seen in a while. The German IFO is the day’s only relevant number, and all eyes are on the rapidly evolving problems with Cyprus. As the EU threw the ball back to the government of Cyprus to come up with its share of the bailout funds and the banks are closed until Tuesday next week’s, headlines are probably on the negative side: EU pressuring Cyprus, Moscow pressuring EU and Cyprus basically begging. The markets might take an interest in risk assets ahead of a possible solution during the weekend – or decide to stay completely risk-off in case of a breakdown in negotiations and the following contagion. But enough of the drivers – let’s review today’s numbers:

France March Business Survey (07:45 GMT). The survey result was originally expected to increase to 91 from February’s 90, but after the Thursday’s terrible PMI numbers the revised expectation is surely much worse. With the French outlook being very bad, even a large positive surprise would not change the big picture. Thus, the number is best ignored but worth noting in case of a minor disturbance in the price of EURUSD.

Germany March IFO Business Climate Index (09:00 GMT). After Thursday’s German PMI’s negative surprise, the IFO index will be closely watched for signs of any chinks in the armour of the Europe’s very, very few growth stories. The consensus forecasts were wiped useless by the PMI, so they are not worth mentioning here. If one takes a look at the sectoral breakdown of the situation and expectation readings, it is easy to see that the growth has been mainly driven by construction and export sector. Further, expectations in all sectors have been rising fast, ahead of the realised numbers – which have only shown one month’s worth of improvement, well within normal variance.

While the growth story looks reasonably robust, it would not be the first time that expectations have been too optimistic. With the whole of Europe suffering, and the PMI having already painted the sky black, the IFO should bring negative news. One thing to add – any effects of Cyprus will not be included in the survey data, so even a slight positive surprise would be brushed off in expectation of worse numbers in April. For more on the PMI see my article from yesterday and on IFO, this piece from February.

US Fed Governor Raskin Speech 12:45 GMT. Sarah Bloom Raskin will be speaking on U.S. Labor Market Conditions at the National Community Reinvestment Coalition 2013 Annual Conference in Washington, D.C. As the Fed is currently officially targeting a 6.5 percent unemployment rate and also watching other employment indicators, Raskin might give a minor headline moment. Employment dashboards for Yellen and Bernanke, as presented by the blogs on The Financial Times.