(News Bulletin 247) – While the prospects for a 50 basis point hike in federal rates in March are receding – 25 basis points hold the line – and the latest figures on inflation in the Euro Zone show a warming Marked in prices as the ECB’s verdict approached, the spot regained some air near $1.13 per euro. However, the spot’s bearish bias remained unchanged.
In terms of statistics yesterday, the final data for the manufacturing PMI in the Euro Zone (IHS Markit) for January came out at 58.7, practically on target.
Chris Williamson, Chief Economist at IHS Markit, shed the following light: “Eurozone manufacturers appear to be better able to weather the Omicron variant than previous waves of Covid-19, with the latest PMI data having reported the strongest growth in production and order books for four months in January.The horizon has also brightened for companies, as the slowdown in the increase in supplier delivery times has boosted the morale of manufacturers whose Optimism has thus recovered to its highest level since June.”
Ms Williamson warns, however, of the potential consequences of escalating geopolitical tensions between Moscow and Kyiv, which together with “the energy price crisis and the risk of monetary policy tightening by global central banks have fueled headwinds blowing on the region’s growth prospects. Thus, despite the easing of tensions on global supply chains, the environment is likely to prove less favorable to demand in the coming months.”
Also published yesterday morning, the unemployment rate in the Euro Zone continued to fall, now at 7.0% of the working population.
On the other side of the Atlantic, very satisfactory signals to report on the side of the publications of the manufacturing ISM and new job offers.
To follow the results of the investigation of the private firm in human resources ADP at 2:15 p.m. Results which will give a valuable taste before the publication of the federal employment report on Friday. The European Central Bank is completing a new Board of Governors tomorrow. Verdict at 1:45 p.m. for the monetary policy decision and at 2:30 p.m. for the press conference.
In the immediate future, and this is the main driver this morning, the first estimates of inflation in annualized data in the Euro Zone show an increase of 2.3% in the corrected prices of energy, food, alcohol and tobacco. This is significantly above the ECB’s target (2.0%) and the market consensus (+1.9%). Including volatile elements, the rise in prices over one year reached +5.1%.
At midday on the foreign exchange market, the Euro was trading against $1,1300 about.
KEY GRAPHIC ELEMENTS
The breakout of $1.1260 rhymed with a powerful increase in volatility. The spot is now visiting levels not seen since the end of May 2020. As seen in the preamble, the exercise now consists of assessing what the shape of the consolidation to come may be in order to optimize a new bearish entry point.
MEDIUM TERM FORECAST
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on the Euro Dollar (EURUSD).
We will keep this neutral opinion as long as the Euro Dollar (EURUSD) parity prices are positioned between the support at 1.1116 USD and the resistance at 1.1360 USD.
CHART IN DAILY DATA
©2022 News Bulletin 247
Source: Tradingsat
I am currently a news writer for News Bulletin247 where I mostly cover sports news. I have always been interested in writing and it is something I am very passionate about. In my spare time, I enjoy reading and spending time with my family and friends.
