Market movers today
In the US, service and manufacturing PMIs for February are due to be released. Both PMIs are at levels indicating a tailwind for the overall economy and have furthermore been rising steadily since late summer 2016. We expect this to continue and look for an increase in both PMIs in February.
In the euro area, PMI figures from Germany, France and the euro area are also due out. Overall, we expect PMIs to see a downward correction in line with the fall across other survey indicators (IFO and ZEW expectations). In manufacturing, recent months have shown an increase in output, but the order-inventory balance indicator has weakened and points to a downward correction in manufacturing PMI. In service, we also expect a decline in line with the other survey indicators. Still, even with the expected decline in February, PMIs remain at solid levels.
In the UK, the Article 50 marathon debate in House of Lords continues today. More than 190 members (record) will be speaking during the two-day debate: 80 yesterday and 110 today. Members of the House of Lords have proposed around 30 amendments to the bill and speeches will be monitored closely for signs of the mood among the members and whether the bill in contrast to our expectation could be delayed.
The Fed's Harker (voter, hawkish) and Kashkari (voter, dovish) are scheduled to speak tonight. We will look for communication about the expected timing of a US rate hike. We still expect the Fed to deliver the next rate hike in June, but think risks are skewed towards an earlier rate hike.
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