A steady stream of PMI data will make its way through the financial markets on Monday, although trading activity is expected to be muted as Australian and key European markets pause for the Easter holiday. The purchasing managers’ index (PMI) provides a high-level overview of domestic economies, focusing on manufacturing and services sectors.
Action begins at 13:30 GMT with a report on Canadian manufacturing PMI. The March reading is expected to show 55.7, on a scale of 1-100 where 50 separates expansion from contraction.
Investors are also bracing for a pair of US manufacturing PMI reports courtesy of IHS Markit and the Institute for Supply Management (ISM). The reports, released 15 minutes apart, are expected to show steady expansion in US manufacturing activity. The ISM report, which is more closely monitored by investors, is expected to come in at 60 in March compared with 60.8 the month before.
The US government will report on construction spending at 14:00 GMT. The monthly report is expected to show growth 0.6% for February following no change the previous month.
On the monetary policy front, Federal Open Market Committee (FOMC) member Neel Kashkari is scheduled to deliver a speech at 22:00 GMT. The Fed raised interest rates last month for the first time since December and is planning to gradually normalize monetary policy over the next two years.
Market participants can expect a more active release schedule later in the week, including high-profile jobs data from the United States. Friday’s nonfarm payrolls report is forecast to show a monthly gain of 198,000 jobs in March. Nonfarm payrolls surged by 313,000 the month before.
Europe’s common currency lost momentum last week, with the EUR/USD plunging from a high of 1.2470 to a low of 1.2291. The pair regained the 1.2300 handle last week and was last seen trading at 1.2314. The common currency faces immediate support at 1.2240, followed by the 1.2200 handle. On the opposite side of the spectrum, key resistance is located at 1.2340, followed by 1.2400.
Cable is coming off a turbulent week, with prices falling more than 200 pips. GBP/USD was last seen trading at 1.4030, where it was little changed compared with Friday’s close. Immediate support levels are located at 1.4010, 1.3985 and 1.3940. On the opposite side of the spectrum, the pair is likely to face resistance at 1.4040, 1.4085 and 1.4125.
The USD/CAD fell sharply in the latter half of March, as the loonie gathered strength on positive NAFTA speculation. The USD/CAD was last seen trading below 1.2900, which is roughly in line with its pre-holiday range. The pair is currently testing the 1.2885 resistance level, with key support located at 1.2800.