March 19, 2021 | by sandeep
5 Issues to Look Out for This Week – 22/3/21
By Mateo Jarrin Cuvi
Acronyms have taken over our outlook for next week. PMI, GDP, CPI, PYPL and more. See here what’s shaking as of Monday, March 23rd!
Will Business Activity Continue to Falter in the EU?
Business activity in Europe has dropped for four straight months now with the pandemic taking a heavy toll on the services sector and its oh-so-beloved social life.
As reported by IHS Markit, the Eurozone’s PMI “edged higher from 47.8 in January to 48.1 in February,” but still showed “a fourth consecutive monthly contraction of business activity,” even though there was “a slight easing in the rate of decline compared to January.”
Fortunately, the big drop in business activity among the region’s services sector was supported by manufacturing, which is currently expanding at its fastest rate since October of last year and one of the steepest in the past three years.
Despite this, EU businesses remain confident the ongoing vaccination campaign will improve things with “sentiment regarding output in the coming 12 months [rising] to the highest since March 2018.”
How did Europe’s Purchasing Managers’ Index (PMI) fare in March? Is business still contracting or is there light at the end of the tunnel?
Find out on Wednesday, March 24th between 8:30 and 9:30 am GMT as the latest figures are issued and prepare those EUR trades!
Prices on the Rise in the UK
Will inflationary pressure affect the value of the GBP?
UK inflation is on the move and should be hitting the government’s desired rate of 2% some time this spring.
As explained by CNBC, in January alone, “consumer prices rose 0.7% in annual terms after a 0.6% increase in December,” a move that was primarily dictated by a rise in the price of food and beverages and fewer discounts on household products such as furniture.
Samuel Tombs, chief economist at Pantheon Macroeconomics, told CityA.M. that this is the start of an upward trend for prices in the country.
“Looking ahead, CPI inflation likely will edge up in February and March, as the recent surge in oil prices is passed on swiftly to motorists,” Tombs said .
“Thereafter, it likely will jump to about 1.8 per cent in April, primarily in response to base effects from the collapse in oil prices last spring, as well as a 9 per cent increase in the default tariff cap for electricity and natural gas prices.”
Join us on this journey tracking CPI when the UK releases February’s figures on Wednesday, March 24th at 7 am GMT.
You know what to do; have those trades ready!
Is US GDP Ready to Take Off?
Q3 GDP for the US increased at the impressive rate of 34% after a calamitous Q2 courtesy of that virus that’s making the rounds.
According to the US Bureau of Economic Analysis, there was a significant increase in Q3 for food, drinks, automobiles, accommodation, healthcare, clothing and footwear and housing.
For obvious reasons, healthcare contributed the most to the GDP pie, adding close to 5% to the total for Q3.
Will Q4 stay true to Q3 and show further signs of growth for the US? If you believe the Federal Reserve, then things look just dandy.
During the last FOMC statement, which happened on March 17th, Fed Chair Jerome Powell announced he expects the US economy to grow by 6.5% in 2021, one of the country’s strongest rates of growth in close to forty years.
So place your trades once you’ve checked out the US’s final GDP for Q4 to be announced on Thursday, March 25th at 12:30 pm GMT.
Shop ‘Til You Drop? Not in the UK, It Seems
Retail sales in the UK are having a rough time recovering from COVID and its many lockdowns.
January’s volumes were underwhelming, dropping by 8.2% when compared to December.
According to the Office for National Statistics, “all sectors saw a monthly decline in volume sales in January 2021 except for non-store retailers and food stores, who reported growth of 3.7% and 1.4% respectively when compared with December 2020.”
These poor figures still beat out the abysmal numbers seen back in April when the pandemic was still in diapers and UK retail sales plummeted by 22.2% compared to those less eventful earlier months of 2020.
So here’s hoping for better results when February’s retail sales are released on Friday, March 26th at 7 am GMT.
It’s an opportune time to trade GBP so make sure you’re wide awake and ready to go!
PayPal: One of Hedge Funds’ Favorite Companies
Since 2010, back when its earnings per share (EPS) was a mere $0.29, PayPal has been on a winning streak.
Today, the payment solution company’s EPS is at $3.88 and analysts expect this figure to grow by up to 45% during the next two years.
Keep in mind too that the company is making inroads into the cryptocurrency world, recently setting its sights on Curv, an Israeli cryptocurrency security firm that helps customers store their crypto assets safely via a cloud-based solution.
This acquisition follows a partnership with Paxos that allows PayPal’s American clients to buy, sell and hold cryptocurrencies using their account.
With e-commerce booming during the COVID-19 pandemic, will PayPal’s strong track record sustain itself well into the future?
Study closely PayPal’s performance this week & prepare those trades!
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*Any opinions, news, research, analyses, prices or other information contained here are provided as general market commentary and do not constitute investment advice. FXPRIMUS does not accept liability for any loss or damage, including without limitation to, any loss of proﬁt, which may arise directly or indirectly from the use of or reliance on such information.