The euro is almost unchanged on Thursday, as EUR/USD is trades at 1.0870 in the European session. On the release front, there were no surprises from Eurozone Service PMIs, all of which were within expectations. It’s a busy day in the US, led by two major events – Unemployment Claims and ISM Non-Manufacturing PMI.
Eurozone Services PMIs were satisfactory, as releases from Spain, Italy, Germany and the Eurozone were above the 50-line, which separates contraction from expansion. Only French Services PMI indicated contraction. Eurozone Retail Sales looked good with a gain of 0.4%, its best showing in six months. The inflation picture on the continent, however, is not nearly as rosy. PPI, a key gauge of inflation in the manufacturing sector, posted a sharp decline of 1.0% in January, its worst showing since December 2014. Consumer inflation indicators are also pointing downwards. Eurozone CPI missed expectations and dropped into negative territory in January, with a reading of -0.1%. This figure comes on the heels of weak CPI numbers out of France and Spain, both of which missed expectations. The dismal inflation picture is sure to increase the pressure on ECB head Mario Draghi to take monetary action at the ECB’s policy meeting next week. What can we expect from the ECB? Possible moves include adopting negative interest rates or expanding quantitative easing scheme, which currently involves asset purchases of 60 billion euros/mth. Either of these moves would likely push the euro to lower levels, so the markets will be keeping a close eye on next week’s ECB policy meeting.
US job reports are closely monitored by the markets, and there was good news on Wednesday, as ADP Nonfarm Payrolls improved to 214 thousand, crushing the estimate of 185 thousand. Will we see a repeat in the official Nonfarm Payrolls on Friday? A strong NFP release could revive speculation about a March rate hike by the Federal Reserve, although this scenario remains very unlikely. Meanwhile, there has been some improvement in the manufacturing sector, which has persistently posted poor numbers. Last week, durable goods reports sparkled, easily beating expectations. ISM Manufacturing PMI improved to 49.5 points in January. Although this points to contraction, this reading beat expectations and marked a four-month high.
Thursday (Mar. 3)
- 3:15 Spanish Services PMI. Estimate 53.9. Actual 54.1
- 3:45 Italian Services PMI. Estimate 52.7. Actual 53.8
- 3:50 French Services PMI. Estimate 49.8. Actual 49.2
- 3:55 German Final Services PMI. Estimate 55.1. Actual 55.3
- 4:00 Eurozone Final Services PMI. Estimate 53.0. Actual 53.3
- 4:58 French 10-year Bond Auction. Estimate 0.63/1.6
- 5:00 Eurozone Retail Sales. Estimate 0.1%. Actual 0.4%
- 7:30 US Challenger Job Cuts
- 8:30 US Unemployment Claims. Estimate 271K
- 8:30 US Revised Nonfarm Productivity. Estimate -3.2%
- 8:30 US Revised Unit Labor Costs. Estimate 4.8%
- 9:45 US Final Services PMI. Estimate 49.8 points
- 10:00 US ISM Non-Manufacturing PMI. Estimate 53.2 points
- 10:30 US Factory Orders. Estimate 2.1%
- 10:30 US Natural Gas Storage. Estimate -49B
Upcoming Key Events
Friday (March 4)
- 8:30 US Average Hourly Earnings. Estimate 0.2%
- 8:30 US Nonfarm Employment Change. Estimate 195K
- 8:30 US Unemployment Rate. Estimate 4.9%
- 8:30 US Trade Balance. Estimate -43.5B
*Key events are in bold
*All release times are EST
EUR/USD for Thursday, March 3, 2016
EUR/USD March 3 at 6:10 EST
Open: 1.0867 Low: 1.0853 High: 1.0887 Close: 1.0876
EUR/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.0616 | 1.0708 | 1.0847 | 1.0941 | 1.1087 | 1.1172 |
- EUR/USD has been flat in the Asian and European sessions
- 1.0847 is providing weak support
- There is resistance at 1.0941
- Current range: 1.0847 to 1.0941
Further levels in both directions:
- Below: 1.0847, 1.0708 and 1.0616
- Above: 1.0941, 1.1087, 1.1172 and 1.1278
OANDA’s Open Positions Ratio
EUR/USD ratio is showing little movement, consistent with the lack of movement from EUR/USD. Long and short positions are close to evenly split, indicative of a lack of trader bias as to what direction the pair will take next.