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Frances February trade balance will be released in ten minutes.UK house prices unexpectedly fell last month, according to British mortgage lender Halifax on Wednesday, as economic uncertainty stemming from the conflict with Iran dampened buyer demand. Halifax reported a 0.5% month-on-month decline in March, compared to a 0.3% increase in February, while the market consensus was for a 0.1% rise. This contrasts with findings from rival mortgage lender Nationwide, which recorded a significant price increase in March. Halifax reported a 0.8% year-on-year increase in its house price index, compared to a forecast of 1.5%. Halifaxs head of mortgage lending, Amanda Bleden, said: "The recent slowdown in the housing market reflects the widespread uncertainty surrounding the conflict in the Middle East. Concerns about rising energy prices have increased inflation expectations, which in turn has led to higher mortgage rates, reducing confidence in rate cuts this year and dampening the initial momentum seen in the market at the beginning of the year."The Indian Embassy in Tehran strongly urges Indian citizens in Iran to leave Iran immediately, coordinate with the embassy, and use the routes recommended by the embassy.Dmitry Medvedev, Deputy Chairman of the Security Council of the Russian Federation: There will never be cheap oil again.Market pricing indicates that the money market has lowered its estimate of the probability of a rate hike at the ECBs April meeting from 60% on Tuesday to 20%.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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