March flash: +2.6% y/y

MNI survey median: +2.5% y/y
MNI survey range: +2.2% to +2.7% y/y

February final: +2.7% y/y

FRANKFURT (MNI) – Eurozone consumer price inflation slowed slightly
less than generally expected in March to +2.6%, remaining above the
European Central Bank’s price stability target for the 16th consecutive
month, Eurostat estimated on Friday.

March’s annual rate, the slowest since August, suggests
price growth accelerated on the month from January’s 0.5% rise. An
official breakdown will be made available April 17.

German state CPI data this week showed higher energy prices fueling
transport costs. Clothing was costlier as well, due most likely to the
unwinding of winter sales.

Buoyed by tensions over Iran and supply outages in non-OPEC
members, oil prices remain well above $120 a barrel, posing risks for
the global economic recovery.

Yet there is no fundamental reason why oil prices remain so high,
Saudi Oil Minister Ali al-Naimi said: “It is the perceived potential
shortage of oil keeping prices high – not the reality on the ground.”

European Central Bank Governing Council member Josef Bonnici said
recent oil price trends pose a bigger threat to economic growth in the
Eurozone than to price stability.

“At present there are no clear signs that higher oil prices have
led to more permanent domestic price pressures in the Eurozone as a
whole,” he added.

Supporting this assessment, the March PMI poll showed prices
charged in the private sector easing (49.9) for the fourth consecutive
month despite a nine-month high in input price inflation (57.3).

Nevertheless, companies hope to pass on more of their rising cost
burden to clients. A European Commission survey showed a growing
proportion of firms in all major sectors looking to raise prices in the
next three months. Still, consumers’ worries about inflation over the
coming year have eased somewhat of late.

The ECB’s staff has revised up its inflation projection for this
year to +2.1% and +2.7% from +1.5% to +2.5% expected in December. For
2013, inflation is seen ranging between +0.9% and +2.3%.

Despite a further pick-up in February, annual M3 growth remained
well below the ECB’s guideline of 4.5%, suggesting medium-term domestic
inflationary pressures remain subdued.

“Market indicators of inflation expectations overall show no signs
of inflation above our medium-term objective,” ECB President Mario
Draghi said earlier this week. “Market expectations of long-term
inflation are fully consistent with our definition of medium-term price
stability.”

– Frankfurt bureau, +49-69-720 142; email: frankfurt@marketnews.com –

[TOPICS: M$X$$$,MT$$$$,M$XDS$]

ITALY DATA: Preliminary March HICP rose 2.5% m/m, 3.8% y/y,
accelerating from +3.4% y/y in February, as the end of the winter sales
saw the index post the steepest m/m gain since since the series start in
January 2001, ISTAT said. HICP data includes the effects of the seasonal
discount sales. –The preliminary main domestic index (NIC) rose 0.5%
m/m and 3.3% y/y, the same y/y increase as in February. –Core NIC
Inflation rose 2.3% y/y, up from +2.2% in February; while net of energy
the y/y rate gained 2.2%, down from +2.3% the previous month.

EMU DATA: Consumer prices in the Eurozone slowed to +2.6% on the year in
March, its lowest rate since August, but from the +2.5% median forecast,
Eurostat estimated on Friday.
– For more information, please see MNI MainWire

Morning all,  not so much today due to the end of 1st quarter but here goes…

EUR/USD: Bids 1.3295/1.3310, also at 1.3250/60, offers from 1.3370 up to the 1.3400 barrier, buy stops through 1.3405

GBP/USD: Bids 1.5970/75, 1.5945/55. Offers 1.6035/50, 1.6070/80 and ahead of a 1.6100 barrier (NB close above 1.6015-200 week MA is a bullish signal)

EUR/GBP: Offers 0.8355/60  and 0.8380/85. bids 0.8330/35 larger down at 0.8300/05

USD/JPY: Offers 82.20/25 better at 82.45/50. Bids 81.80/85 and 81.45/50, likely stops just below 81.20

EUR/JPY:  Offers 109.85/90 and 109.95/00. Bids 109.25/30 and 109.00/05, sell stops down through 109.00, ahead of good bids 108.75/80

AUD/JPY: Bids 85.10/15 and 84.90/95 .major support 84.60. Resistance 85.65/70 and 85.80/85

AUD/USD: Offers 1.0410/15 buy stops on a break of 1.4015, offers above at 1.0445/50. Bids 1.0385/90, (110 dma @ 1.0382), more bids 1.0365/70 and larger at 1.0305/10 in front of barrier at 1.0300 (part of a 1.0300-1.0900 DNT)

USD/CAD : Offers 1.0040/50 large model buy stops on a break up 1.0050. Bids 0.9955/65

81.00 or 83.00.

Reasoning as usual much welcomed but not obligatory.

I think I know what the strong bias is going to be before I ask

1.3250 or 1.3450?   We’re at 1.3335 presently.

You’ll notice we’re having a new poll. That’s because as far as I’m concerned 1.3250 was hit yesterday afternoon. Anyone disagreeing will be banned from commenting on the site ;)

Reasoning as always much appreciated, but not obligatory.

EUR/USD sits at 1.3345.

Talk of trailing sell stops through 1.3340 now. Do I think they’re large?……….NO.

UPDATE:  Apart from cable ofcourse.  Both Joe and I traded cable during our careers.  Personally I think anyone trading cable on a friday which is month end needs their head examined

JAPAN DATA: Business sentiment in Japan improved for the third
straight quarter in March, monthly data released by the Japan Chamber of
Commerce and Industry show. The Local Business Outlook Index for all
industries stood at -23.9 in March, up from -33.4 in February. The index
for manufacturers, which has a close correlation with the Bank of
Japan’s quarterly Tankan survey (March data due Monday), stood at -15.3
in March, up from -27.6 in February and improving from -24.8 three
months earlier. The group surveyed 2,820 firms from Mar. 16 to Mar. 23.
The Tankan major manufacturers index is forecast to rise to -1 in March
from -4 in December, according to the median forecast of economists
surveyed by MNI.

Everyone’s got an opinion:

Irish Fin Min: Expects maximum size of combined euro zone bailout funds under discussion on Friday could be 940 bln euros. Any combined euro zone bailout fund size of 800 bln euros or above is in the right ballpark.

Finnish Fin Min:  Volume of 940 bln euros for euro zone bailout funds would be too high for Finland, another solution needed

French Fin Min: Size of euro zone firewalls still remains open, hopes for a deal on Friday

Dutch Fin Min: In favour of bigger euro zone bailout funds

Exactly in line with Reuter’s median forecast of………-6.4%.

Stronger than Reuter’s median forecast of 0.04.

Demonstrably stronger than Reuter’s median forecast of +0.2%.

French February producer prices +0.8% m/m, stronger than Reuter’s median forecast of +0.5%.

Says Sarkozy on radio.

I haven’t got the foggiest what the inital target was, so I’ll take his word for it……

FRANCE DATA: Feb PPI +0.8% m/m, +4.3% y/y; Jan: +0.7% m/m, +4.3% y/y
–Feb manufacturing PPI +0.8% m/m, +3.8% y/y
–Feb oil product prices +3.5% m/m, +18.5% y/y
–Feb food and tobacco prices +0.5% m/m, +3.4% y/y
–Feb industry import prices -0.5% m/m, +3.7% y/y
See Mainwire for more details

FRANCE DATA: Feb sa consumer spending on goods +3.0% m/m, +0.5% y/y
– Above most analysts’ forecasts; MNI survey median fcst: +0.4% m/m
– Jan-Feb consumer spending +0.9% q/q; 4Q +0.3% q/q
– Jan goods spending unrevised (-0.4% m/m)

FRANCE DATA: 2011 public deficit 5.2% of GDP; 2010 7.1%
- 2011 public revenues 50.7% of GDP; outlays 55.9%
- 2011 public debt 85.8% of GDP; 2010 82.3%
- 4Q 2011 public debt +E24.8 bln q/q to 85.8% of GDP

Just reading some stuff from a UK clearer.

Their model/s leave them expecting moderate to weak USD selling month end.

Moderate selling vs likes of euro, yen and sterling.

Weak selling vs likes of aussie and canadian dollar.

It has to be noted, month end flows are just one factor to be taken into consideration and not the be all and end all. 

These expectations will help explain some of the recent dollar weakness.

We’re at 1.3357.

Could be doing it on behalf of someone protecting 1.3400 barrier interest.  Just a bit of conjecture on my part

Versus Reuter’s median forecasts of +1.2%, +0.1% respectively.

Financial bookies see FTSE and DAX up as much as +0.7% and CAC 40 up as much as +0.9%.