The euro continues to have a quiet week, as EUR/USD trades just above the 1.09 line. On the release front, Eurozone and German Manufacturing PMIs pointed to expansion. The Eurozone report came in at 56.8, edging above the forecast of 56.7, while the German reading of 58.2 matched the estimate. There are no major US events on the schedule. On Wednesday, we’ll get a look at the German unemployment rate and Eurozone Preliminary Flash GDP. In the US, the Federal Reserve will release its policy statement. The other key releases are ADP Nonfarm Payrolls and ISM Non-Manufacturing PMI.
The eurozone economy continues to expand, and more growth has meant more jobs and lower unemployment figures. Just a year ago, the eurozone unemployment rate was at 10.3%, but the rate has been steadily decreasing since then. In February, the rate dropped to 9.5%, and the March release is expected at 9.4%. Germany has led the way, with the unemployment rate dropping to 5.9% in February. Unemployment rolls continue to shrink in Germany, and the decline of 30,000 unemployed persons in February easily beat expectations. The March reading is expected to show another decline of 10,000. The markets will also be monitoring US employment numbers, which kick off on Wednesday with the release of ADP Nonfarm Payrolls. The indicator is expected to drop sharply to 178 thousand in March compared to 263 thousand a month earlier.
It’s been a rocky start for President Donald Trump, who just marked the 100-day milestone of his term in office. Trump’s popularity is at record lows for a new president, but he managed to avoid the embarrassment of a government shutdown, as lawmakers reached an agreement on the weekend. The short-term spending deal, which has bipartisan support, provides funding for government services until September 30th. The deal does not include any funding for a border wall with Mexico, marking a clear concession on the part of Trump. The White House is hoping that this small victory will be the prelude to more cooperation between the Republicans and Democrats on Capitol Hill, as Trump will need some support from the Democrats in order to pass tax reform legislation, one of Trump’s major campaign planks.
