Market Drivers March 1, 2019
- Dollar powers on into the week-end
- UK PMI Manufacturing in line
- Nikkei 1.02%; DAX 1.14%
- Oil $57/bbl
- Gold $1306oz.
Europe and Asia
EUR: EZ PMI Manufacturing 49.3 vs.49.2
GBP: UK PMI Manufacturing 52.0 vs. 52.0
North America
USD: Personal Income 8:30
USD: PCE 8:30
CAD: GDP 8:30
It’s been a very quiet night of trade in FX with most majors in very narrow 20 pip ranges through Asian and European dealing but the dollar continued to enjoy the post USD GDP flows remaining bid across the board.
Yesterday’s better than expected US GDP data which suggested that US economy may be more robust than originally thought continued to shift trader sentiment toward the buck with USD/JPY coming within a pip of the 112.00 figure in morning London dealing. The pro-dollar flows have taken the pair to its highest level in more than two months as investors are now betting that any further improvement in US data could shift the Fed back to tightening mode before the year-end.
On the data front, UK PMI Manufacturing printed generally in line at 52.0 vs. 52.0 eyed but lower than the 52.6 print the month prior. According to Markit,
“February saw manufacturers continue to implement plans to mitigate potential Brexit-related disruptions. Purchasing activity was scaled-up to stockpile raw materials, leading to a survey-record expansion in input inventories. The uncertain outlook also impacted on business optimism and employment, with confidence at a series-record low and the rate of job losses hitting a six-year high. “
GBP/USD slid lower for most of the night, but the move was very limited and was likely the result of profit taking after a strong rally this week that took it full two big figures higher. Cable could test the 1.3200 support later in North American trade if the pro-dollar move extends into the weekend.
In North America, the market will get a look at Canadian GDP and US PCE and Personal Income data. Personal income data is projected to rise 0.4% from 0.2% the month prior which would be positive to the current pro-dollar narrative and could push USD/JPY through the key 112.00 figure as the day proceeds.