Rational FX: Euro zone data expected to come out strong [21/02/2011]

Market Movers Friday

• On Friday morning German PPI came out better than expected both MoM and YoY. This had a detrimental effect on the Euro however as it shows that one Economy is leading the way in the Eurozone. This is negative due to the fact that the Euro zone may have to look at raising interest rates which could badly affect some of the weaker economy’s in the zone.
• In the UK on Friday the 2 major pieces of data that were released were Mortgage Approvals and Retail Sales. The first piece of data came out negatively and the latter positively. Retail Sales had more of an effect and saw GBP rise as we continue to see the trend of sterling strength in the market.
• There was no data in the UK.

Today’s Market Movers

• There is no data out in the US today due to the President’s holiday.
• In the UK today the main data out today is the Right Move House Index. This has already come out at 3.1% MoM, 2.9% better and 0.3% YoY, slightly worse this figure may cause a reaction in the market as the property market in the UK is one of the leading indicators of the current economic situation and although this shows a MoM improvement it still shows that we are still recovering.
• At 09.30am today Germany will release its Purchasing Managers Index, both services and manufacturing.  These are expected to come in pretty much in line with last month’s figures, which could see the Euro weaken further with fears remaining that there is too much of a difference between the strongest and the weakest economies to raise interest rates.
• The last piece of data out is from the Euro zone as a whole. This comes in the way of the Purchasing Managers Index, both services and manufacturing. This is expected to come out strong as well and may help the Euro from further decline as it will show strength from the economy as a whole.