- UK labour data to be released in the morning, BoE decision on Thursday
- German ZEW index expected to show 12th negative reading in a row
- API report expected to show a 1 million barrel decline
Tuesday could be another crucial day for the British pound as another Brexit vote was rumoured to be held today. However, no changes to the deal were made and Theresa May was not allowed to ask parliament for another vote on it. Having said that, traders will have to focus on data instead. Elevated volatility may be spotted in the morning hours as the UK labour market report is scheduled for release followed by ZEW sentiment data. Last but not least, API will release its estimates on oil inventories in the evening.
9:30 am GMT - UK, Labour market report for January. The UK wages are rising at the fastest pace since mid-2010. In case this robust growth is maintain inflationary pressures may mount and price growth may actually follow higher as well. However, Bank of England is unlikely to make a move unless more clarity on Brexit is provided. Having said that, today’s reading may move the market but may be insignificant in terms of current BoE policy. Note that the Bank of England will announce its next interest rate decision as soon as this Thursday.
10:00 am GMT - Germany, ZEW economic sentiment for March. The German sentiment indicators are showing a disappointing picture of the Europe’s biggest economy. ZEW economic sentiment index is expected to show a reading of -11 pts today. While it is a slight improvement against previous -13.4 pts, a negative reading for March would mark 12th consecutive reading in “pessimism” territory (below 0 pts). Situation for the euro area gauge looks a bit better but even in this case we are expected to see 10th month of negative prints (-15.1 pts). However, it should be noted that ZEW surveys are conducted among institutional investors and analysts therefore their judgement is based on forecasts rather than actual situation (as it is in the case of PMIs).
8:40 pm GMT - API report on oil inventories. Energy ministers from OPEC+ countries met yesterday in Baku, Azerbaijan. Russian representative asked other oil producers not to decide on extension to current cuts during the meeting in April. Nevertheless, OPEC+ members pledge to continue with deeper than agreed cuts in the following months and then decide on the future of production cuts in June. Meanwhile, API data is expected to show 1 million barrel decline and any bigger draw may send prices higher.
Central bank speakers scheduled for today:
- 9:35 am GMT - ECB’s Praet
- 1:00 pm GMT - Riksbank’s Skingsley
WTI (OIL.WTI) managed to remain above the $58-59 price zone this week. This is somewhat in contrast to Brent (OIL) as it lags behind near the upper limit of its respective resistance zone. The first hurdle for WTI bulls lies in the vicinity of $61.80 handle, where the 200-session moving average can be found. In case tomorrow’s DOE report shows another strong draw like last week, a test of the aforementioned average cannot be completely ruled out. Source: xStation5