This morning has seen a raft of economic data in Europe, but all the numbers tend to have a relatively muted impact on the market, so the euro has had little in the way of a reaction. All the data released this morning is interesting in that it is one of the few economic releases that is released early and are all called ‘Flash’  as the data is given to Thomson Reuters subscribers 2 minutes before the public release time listed on the calendar – early market reaction is usually a result of trades made by these subscribers. As far as the number are concerned, above 50.0 indicates industry expansion, below indicates contraction. The data is collected by a survey of the purchasing managers in various industries and is therefore considered to be a leading indicator. This mornings news covered the French and German index, and the euro strengthened against the US dollar on the results which were all came in much as expected, but all showing a further contraction in the economy.

This afternoon we move to the US for the Core CPI data,which measures the change in the price of goods and services purchased by consumers, excluding food and energy. Food and energy prices account for about a quarter of CPI, but they tend to be very volatile and distort the underlying trend so the FOMC usually pays the most attention to the Core data – and so should we!! If the numbers are better than forecast then this is generally a good sign for the currency, and the forecast this time is 0.1% against a previous of 0%. The CPI numbers are released at the same time, but have less of an impact for the reasons explained. Good luck and good trading and have a great weekend.