Daily Analysis: Latest Round Of PMI's To Drive Sentiment

Our daily analysis of EUR, GBP and USD.

DAILY ANALYSIS

EUR

• ECB President Christine Lagarde spoke yesterday at the IMF World Bank Spring Meetings, making plenty of points for analysts to scrutinise.
  • Lagarde commented on current rumours of Trump removing Fed Chair Jerome Powell, stating that she certainly hoped this ‘was not on the table’. Lagarde chose not to comment on how this would impact the markets but, based on the tone of her comments, the impact would be seismic.
  • Lagarde also commented on the scope of EU-US trade negotiations, stating that ‘it’s in the nature of policymakers to want to sit down and argue their case’ but that she confident that ‘there can be a dialogue’ on this. Paving the way for potential negotiations soon due to the ‘joint interest’ between the two regions.
• Today, attention will turn to the latest round of PMI releases at 9am.
  • Manufacturing is expected to show a contraction at 47.5 down from 48.6 last time out.
  • Services data is expected to show a slight expansion of 50.5 whilst still be down from 51 last time out.

USD

• An IMF report yesterday downgraded US growth forecasts from 2.7% to 1.8% following President Trump’s tariff announcements in recent weeks. It also stated at 40% chance of a US recession as a result of the tariffs.
• Data was at a premium out of the US yesterday however, rumours of Trump turning up the pressure on Powell continued to weigh heavy on the Dollar and US stocks, with both GBP/USD and EUR/USD reaching fresh highs.
• Today, all eyes will be on the next round of PMI releases at 13.45pm for further indication of how the US economy is reacting to market conditions.
  • Manufacturing is expected to fall into a contraction reading of 49.4 down from 50.2 previous.
  • Services are expected to decline from 54.4 last time out to 52.8 however, any reading above 50 signals expansion.

GBP

• The Greenback was not the only economy named to be at risk by the IMF yesterday, with expectation for growth in the UK also slashed from 1.6% to 1.1%.
• Reports early this week that the UK-US trade talks could be moving in a positive direction, pressure is now ramping up on UK Chancellor Rachael Reeves to deliver a trade deal. Reeves is currently in Washington DC for the IMF’s spring meetings and is preparing for her crucial meeting with US counterpart Scott Bessent.
• Alike both the USD and EUR, attention will be on today’s PMI readings for April which reported at 9.30am.
  • Manufacturing remains staggering low with expectation being of a reading of 44 versus 44.9 last time out.
  • Services however, remains in expansionary territory with a reading of 51.3 forecasted, whilst still lower than the 52.5 recorded in March.
• Bank of England Governor Bailey will also speak at 5.15pm today as the market will be keen to hear how the policymaker dissects recent findings.

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