Daily Analysis: UK Chancellors Grey Spring Statement

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

GBP

• Reports continue to surface of the bleak economic outlook expected to be delivered by Chancellor Rachel Reeves tomorrow. Two key documents are expected, the revised forecast from the Office for Budget Responsibility who are set to cut growth in 2025 in halve to 1 per cent.
  • The second document confirms the Chancellor’s plan to balance spending with tax receipts is in disarray as the £9.9bn headroom has already been eroded.
• S&P Global/CIPS Composite PMI for March released yesterday rose to 52 versus 50.5 previous.
  • S&P Manufacturing PMI disappointed unexpectedly dropping to 44.6 after an expected boost to 47.3 against February’s 46.9.
  • S&P Global Servies PMI showed an improved reading of 54.3 versus forecasts of 51.2.
• GBP/USD hovers above 1.2900.

USD

• Light day of data out of the US today will leave the greenback susceptible to organic movement.
• S&P Manufacturing PMI for March fell below the 50 mark signaling contractions – estimated at 51.9 it was a surprise reading at 49.8.
• S&P Services PMI did improve considerably to 54.3 versus 51.2 forecast.
• EUR/USD trading under the 1.0800 handle for the first time since March 3rd.

EUR

• Momentum behind the Euro has curtailed slightly in the past 24 hours as the single currency partially retraces gains against its G3 counterparts.
• Mixed bag of PMI data released yesterday out of the bloc.
  • German Manufacturing PMI improved from February's reading of 47.6 to 48.7, surpassing forecasts but still entrenched under the 50 mark.
  • German Services PMI managed to hold above 50 however showed a dip from the previous which defied the expected improvement.
  • Eurozone PMI data reported the same trend – Manufacturing PMI improved but remains below 50.
  • Eurozone Services data failed to meet forecasts of 51 at 50.2.
  • EURGBP threatens to fall back below 0.8350.

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