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Yesterday was somewhat a chaotic day. US President Donald Trump had time to expand the list of Chinese goods and technologies with a 25 percent tax, as China immediately announced maintaining the 25 percent tariffs on American goods. Meanwhile, the unemployment data in the euro area showed a decrease in the indicator from 8.6% to the expected 8.5%, and the preliminary estimate of the euro area CPI for March rose from 1.1% YoY to the expected 1.4% YoY. The basic CPI remained at 1.0% YoY against the forecast of 1.1% YoY. The new jobs data in the US private sector from ADP came out strong. In February, the data was revised higher from 235 thousand to 246 thousand, while the March indicator was 241 thousand against the expectations of 208 thousand which creates the prerequisites for Friday non-farm higher than the forecast. The factory volume orders in February increased by 1.2% against expectations of 1.7% and ISM Non-Manufacturing PMI for March fell from 59.5 to 58.8, which was even worse than the negative forecast of 59.0. Also, the final evaluation of Services PMI was lowered to 54.0 from 54.1 against the expectation of an upward revision of 54.3.
During the chaos, the stock market opened with a falling gap but the S & P500 increased by 1.16% at the end of the day. The foreign exchange market failed to get away quickly from fears but the euro gained 6 points and the Canadian dollar by 36 points (the US dollar fell against the Canadian), but the yen closed the day up by 16 points.
Today, the data on retail sales in the euro area for February will be released. The forecast implies an increase of 0.6% after -0.1% in January, but due to the unexpected drop in retail sales in Germany by 0.7% shown on Tuesday, the data may came in worse. The final estimates of business activity in the euro service sector for March are projected to be unchanged by 55.0 points. The producer price index of the euro area for February is expected with a zero change after growth of 0.4% a month earlier.
In the United States, the data of secondary importance are released. However, the weekly report of the Ministry of Labor on appeals for unemployment benefits showed a forecast of 225 thousand after 215 thousand last week which could strongly strengthen investors' opinion that tomorrow's Non-Farm Employment Change will be higher than the projected 190 thousand. The trade balance for February is expected to be traditionally negative at -56.9 billion dollars against -56.6 billion in January.
As a result, we are waiting for the strengthening of the dollar and the decline of the euro to 1.2210 and further to the range of 1.2155 / 65.
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