EUROPEAN session review: ECB meeting is in market focus

Data released: 

06:00 GMT UK Nationwide Housing Prices s.a (MoM) (Feb) 0.4% 0.8% 0.7% Revised from 0.6% 

06:00 GMT UK Nationwide Housing Prices n.s.a (YoY) (Feb) 9.5% 9.6% 9.4% 

08:30 GMT UK PMI Construction (Mar) 62.5 63.0 62.6 

09:00 GMT EMU Gross Domestic Product s.a. (YoY) (Q4) 0.5% -0.3% 

09:00 GMT EMU Gross Domestic Product s.a. (QoQ) (Q4) 0.2% 0.1% 

09:00 GMT EMU Producer Price Index (YoY) (Feb) -1.7% -1.6% -1.4% 

09:00 GMT EMU Producer Price Index (MoM) (Feb) -0.2% -0.1% -0.3% 

Euro zone inflation fell to the lowest level in almost five years last month at just 0.5% in March, below expectations, which will heap more pressure on the ECB which maintains that it does not yet prove a significant threat to the economy. The ECB's faith in their 'no deflation threat' mantra was restated yesterday as ECB's vice president Constancio said he doesn't expect the euro zone to slip into deflation 

EURO 

EU GDP rose 0.5% in Q4 versus decreasing 0.3% in Q3 2013. 

EU PPI fell 0.2% m/m missed the expectations at -0.1% m/m. After that speculatons about deflation pressure increasing in EU were activated. 

EUR/USD stays under $1.3800. Initial resiastance is at $1.3840, then - at $1.3875 (Mar 24 highs). Break under $1.3700 (Friday’s lows) may widen losses to $1.3640 (Feb 27 lows). 

POUND 

This mornind data showed UK PMI index fell to 55.3 in March versus 56.2 in February, missed forecasts at 56.7. 

GBP/USD retreated to $1.6640. Resistance comes at $1.6700, then - near $1.6785 (Mar 7 highs). Minor support comes at Friday’s lows on $1.6600, then - at $1.6550 (Mar 27 lows). 

YEN 

The yen fell for a fourth day against the dollar. Japanese companies have signaled confidence in Prime Minister Shinzo Abe’s efforts to stamp out deflation. Consumer prices will rise 1.5% over the next 12 months and 1.7% in three years, according to companies responding to the Bank of Japan’s Tankan survey. 

USD/JPY holds under session’s highs on Y103.90, ahead of Y104. 40/75. Minor support comes at Y102.20. Below Y101.70 support comes at Y101.20 (Mar 14 lows). 

DATA AHEAD 

At 22:30 GMT Mar AiG Performance of Services Index comes.

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