Summary:

  • UK inflation will be the most important figure during today’s session
  • German ZEW index is likely to show a little less optimistic moods in March
  • API is going to report its weekly change in oil stocks

There is no doubt that the British pound divided and conquered on Monday being the best performer within the G10 basket. Those gains came on the heels of revelations pertaining to the Brexit story as both sides agreed terms of a transition period which ought to lead to the orderly withdrawal of the United Kingdom. As a result the pound shot up above a 1.40 handle and the basic question is whether such an incredible jump may morph into a sustained and gradual pick-up. Today’s inflation data is likely to dispel concerns regarding elevated price growth.

9:30 am BST – UK inflation: As we’ve mentioned above the pound was offered a torrent of great news on Monday which led to a significant increase of the currency. Having regard to the upcoming events including the Bank of England meeting on Thursday one needs to be geared up for hectic moves this week, and the first chapter of the entire story will take place already today. Economists surveyed by Bloomberg expect CPI grew 2.8% in February while core price growth is likely to show 2.5% – both gauges in a year-over-year basis. Keep in mind that if inflation really slowed down last month it could act to the detriment of the British currency discouraging the BoE from quick rate hikes aimed at fighting off lofty price growth.

10:00 am BST – German ZEW index: The country’s leading indicator is forecast to ease in March retreating from 17.8 to 13 points. It would be in line with the latest deceleration seen in soft indicators such as PMIs, IFO and so on. While it rarely tends to be a market moves for either the euro or the DAX, indications with regard to the future outlook appears to deserve particular attention. Needless to say that another miss could raise concerns that a peak in the current business cycle may have been already passed being a short-lived drag on the shared currency.

8:40 pm BST – Weekly change of oil stocks by API: Over the past two weeks the API reported builds of crude stocks and the EIA calculations corroborated those numbers as well. Taking seasonality into account another healthy increase of inventories should not be especially eye-popping, however, do notice that the last EIA report illustrated a tremendous decrease of gasoline stocks, and on that account one may count on gradually rising demand for raw oil from US refineries, a move which is likely to help inflated stocks dwindle again.

link do file download linkThe EURGBP seems to be eager to move a notch lower before a resumption of a possible swing to the upside if range trading is to prevail going forward. Source: xStation5