Economic calendar: Soft indicators and ADP release to dominate the day

Summary:

  • Final PMIs from Europe and the first reading of UK services PMI
  • US ADP report will offer first indications ahead of the NFP release
  • Crude oil inventories data and non-manufacturing ISM in the spotlight this afternoon

9:30 am GMT - UK services PMI: Indices for manufacturing and construction sectors proved to be quite solid, however, the substantial improvement in manufacturing came predominantly from a spike in factories’ stockpile. The consensus ahead of today’s services index points to 50.9 points in March, down from 51.3 points seen in February. Keep in mind that the services sector is the most important for the UK economy. Apart from this index, we will be offered final PMIs from European countries (from Spain and Italy there will be first releases).

1:15 pm GMT - ADP employment report: The labour market is by far the best looking spot in the US economy. However, the recent Fed’s rate decision suggested that the central bank is able to tolerate even the quicker pace of wage growth as its relationship with inflation growth has weakened over recent years (this is not the case solely in the US). Nevertheless, the continued strong data from the labour market seems to be a prerequisite to keep another rate hike in this monetary cycle on the table. The consensus points to 175k new jobs in March.

3:00 pm GMT - non-manufacturing ISM: The ISM index for manufacturing showed a solid rise and if today’s report for services also proves to be better than expected, it could mean that the worst has already been passed in terms of the global economic slowdown (the slowdown will be proceeding but the second half of the year may bring a bit rosier outlook). This notion has already been confirmed by a series of China’s PMIs producing a firm rebound in March. If this was not a one-off jump, it may foretell the better performance of the global economy for the rest of the year. The consensus suggests a decrease in March to 58 from 59.7 in February.

3:30 pm GMT - DoE release on oil stocks: Oil prices are recovering this morning thanks to an improvement in market sentiment. However, the API report we got yesterday was not so optimistic as it showed a surprising build in crude inventories. Meanwhile, market expectations suggest US crude stockpiles have decreased last week by 1.1 million barrels while gasoline inventories have fallen by 1.6 million barrels.

Central bankers’ speeches:

  • 1:30 pm GMT - Fed’s Bostic, George, Barkin

  • 10:00 pm GMT - Fed’s Kashkari

The EURCAD is trading in the vicinity of the important support ahead of the DoE release. Source: xStation5

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