Foreign exchange markets are set for a busy week as the first-full week of March commences. A month which was expected to see the departure of the UK from the European Union. Even though this is looking increasingly unlikely, these next couple of weeks could produce a multitude of potential outcomes.
Data-wise, this week’s highlight will come from across the pond, where we’ll be treated to the most recent labour market report. As usual, the most important component of this report stems from the average hourly earnings gauge. With unemployment at very respectable levels, the key metric is now whether there’s any upward pressure on wages.
This week will also see a couple of important central bank decisions. The European Central Bank will offer their latest set of inflation and growth forecasts. It’s now become more than clear that the region is slowing down, hence it will be important to interpret Mario Draghi’s tone. No doubt his performance will be a dovish one – but by how much will be the key to determining which direction the shared currency heads. There’ll also be an announcement from the Reserve Bank of Australia with no change expected. However, this will be an important announcement as speculation has been on the rise that the central bank is becoming more open to the prospect of potentially lowering rates if the economy continues to slow.
Domestically, 2 pieces of economic data are worth noting. Firstly, this morning’s construction PMI numbers followed by tomorrow’s services release. They’ll be a huge amount happening on the Brexit front as May & co. attempt to extract concessions from the EU to help her 2nd try at passing the withdrawal agreement.
Written by Viv Savani. 8:39am, March 4th 2019
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