European markets and US futures are trading higher this morning and are set to open close higher for the week. Bad news is a good news, this phenomena is back because any kind of slackness in the economic data is increasing the odds that the ECB will be forced to announce the full scale quantitative easing in the EU and the imminent rate hike in the US may not take place this year. The German GDP data which we have received yesterday has confirmed that the country’s growth has actually contracted and keep in mind that we are talking about the biggest economy of the Europe here.
This GDP data in Germany could make the Bundsbank to finally through the towel and back the US style quantitative easing in Europe. As for the geopolitical tensions between Russia and Ukraine, the recent comments by president Putin has certainly eased off the tensions, but there is still no solution for the humanitarian tracks which have been sent by Russia to Ukraine.
The economic docket is fairly full today and we kick start this with UK’s GDP data which is due at 08:30GMT. The forecast is that this data will remain unchanged with the reading of 0.8% on the quarter. Given that the UK trade balance data which was released last week confirmed that the trade deficit was widened and the export has fallen more as compared to imports, the odds are higher that the growth in the UK is going to remain strangled by the slowdown in the EU. Later in the day, we have also have US PPI and consumer sentiment data due and the forecast is for 0.1% and 82.7 respectively.
Disclosure & Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.
by Naeem Aslam