Euro Update
Earlier published data shows that Chinese Composite, Manufacturing, and None-Manufacturing PMI (Mar) all heading forward and led the numbers much better than expectations, while U.K. GDP for G4 2020 compressed just -7.3%, a bit less than -7.8% of expectation, confirming that British economy on its right foot, getting back to the normal situation.
Besides that, thanks to good vaccination progress in both China and the United Kingdom, reopening’s are going forward faster, while E.Z. is entering another lockdown period. However, German employment data confirmed a 6.0% unemployment rate of February in March as well, while 8 thousand new unemployment registered against 13K expectation and 37K of February.
Despite the created pessimism, European countries with previous quarantines and lockdowns learned how to keep the jobs, mainly manufacturing jobs, even though service sectors still will be under pressure.
On the other hand, the latest published inflation data from the U.S. shows a positive move, and in line with growing Bond Yields, higher inflation is much more expected there. In contrast, earlier data from Europe shows a -0.2% decline in U.K. Nationwide HPI in March, and French CPI at 0.6%, a bit less than expected. Euro Zone CPI also confirmed the 1.3% (YoY) in March. Italian CPI data also shows a bit weaker than expected, same as French. Generally, the U.S. higher inflation will lead the cash flow into the U.S. market and Yields, supporting the USD demand against the Euro.