A relatively quiet day once again for fundamental news on the economic calendar today, with no major news stories in Europe and only one ‘red flag’ item in the US, namely the Advance GDP data. So starting in Europe this morning we have the CPI Flash Estimate which is forecast at -0.4% against a previous of -0.1%. If this forecast is correct then this indicates the inflation in Europe is slipping further into negative territory, which will no doubt help to convince the markets that the ECB will leave interest rates at record lows for some time yet as it bids to boost confidence in a badly hit economy. At the same time as this release we also have the Italian Preliminary CPI numbers which are forecast at 0.1% along with the Unemployment Rate for Europe which is forecast to worsen from last time to 9.7% from 9.5%.

The main fundamental news item of the day is of course the Advance GDP figure in the US, which is forecast to come in at -1.3%, against a previous of -5.5%. Whist this would normally be seen as bad news, it has to be seen in the broader context of the last two quarters where the economy shrank by 6.3% in the fourth quarter and 5.5% in the first, which caused the markets and many economists to worry about the possibility of a depression. So in the context of the last few months this figure ( if achieved ) may actually be seen as good news. The week rounds off with the Chicago PMI data, a diffusion index based on a survey of Purchasing Managers in the Chicago area, with the forecast for this afternoon at 42.1, up from last time at 39.9.

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