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Economic calendar: Services survey gauges in the spotlight

- UK services PMI expected to drop into contraction area
- ISM non-manufacturing seen coming in higher in February
- Mark Carney to testify before House of Lords’ committee today

Investors can find some noteworthy readings as well as a number of speeches from central bankers scheduled for today. GBP and EUR may become more volatile in the morning as UK services PMI and retail sales from euro area will be published. Survey gauge for the US services sector will be release in the afternoon followed by API estimates on oil inventories in the late evening. Last but not least, Bank of England Governor, Mark Carney, will appear before House of Lords’ Economic Affairs Committee at 3:35 pm GMT.

9:30 am GMT - UK, Services PMI for February. “Meaningful” Brexit vote was postponed until 12 March. While deal still seems to be out of reach, scheduling key vote just 17 days ahead of divorce date raised odds for delaying Brexit. However, unless things are made more clear the British pound is likely to trade on headlines. Meanwhile, market consensus suggests that services PMI index dropped to 49.9 pts in February visiting “contraction area”. Note that construction PMI dived below 50 pts threshold yesterday therefore similarly downbeat outcome in another sector could put significant pressure on GBP.

10:00 am GMT - Euro area, Retail sales for January. While retail sales readings for the whole euro area seldom result in major price swings on the EUR market, it is wise to follow them as they hint at consumer activity, major driver of economic growth. Strong demand on the retail level may ensure ECB members that the economy is still on growth track and eventually may encourage them to tighten policy later this year. Today’s reading is expected to come in at 2% YoY against previous 0.8% YoY.

3:00 pm GMT - US, ISM non-manufacturing for February. While Conference Board surveys released last week showed a major improvement in moods, the ISM manufacturing index missed expectations and dipped lower. Services sector accounts for a far bigger share of the US economy therefore today’s reading will be watched closely. Market consensus expects a higher reading of 57.3 pts against previous 56.7 pts. However, one should keep in mind that manufacturing reading was also expected to move higher so traders should be aware of possible deterioration here as well.

9:40 pm GMT - API report on oil inventories. Oil prices halted advance recently as concerns over missing Venezuelan supply began to fade. Namely, Russia announced that it will supply Venezuela with naphtha needed to thin out heavy crude, what would allow to get Venezuelan commodity ready for shipping and sale. Such a development rises hopes of rebound in the Venezuelan oil industry that recently saw its output drop to lowest levels since 1940s. Meanwhile, release of estimates on oil inventories by the American Petroleum Institute may trigger a short-term price swing in case the actual reading deviates significantly from expected values.

Central bank speakers scheduled for today:
- 1:00 pm GMT - Fed’s Rosengren
- 2:30 pm GMT - Fed’s Kashkari
- 3:35 pm GMT - BoE Governor Carney
- 4:30 pm GMT - Fed’s Barkin
- 10:10 pm GMT - RBA Governor Lowe

GBPUSD is likely to be more volatile today on the back UK services PMI release and Carney’s testimony in the House of Lords. The pair failed to breach the resistance zone ranging 1.3220-1.3300 in the previous week and keeps moving lower since the start of this week. In case the downward move is extended, the 50-session moving average (green line on the chart) may be a technical hurdle to watch. Source: xStation5

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Morning wrap (03.12.2021)
Daily summary: US stocks rebound, OPEC+ sticks to production plan