GBP Higher on Solid Manufacturing PMI, Onto ISM

Chinese PMI; Eurozone manufacturing PMI unrevised but the unemployment rate higher; weak data from Spain; Swiss retail sales declined; UK manufacturing solid. Market turns to ISM manufacturing and speeches by

FED's Pianalto and BOC's Carney. The Golden cross Ashraf warned about on Monday's Premium piece is now in effect. Premium Subscribers see the link in Monday's edition.

The greenback is only a little changed against the majors. European equities are slightly lower and JPY is the relative strength winner.

Risk assets gapped higher in the Asian session after Chinese manufacturing PMI rose to 53.1 in March from previous 51.0. However, not even two hours later when HSBC Chinese manufacturing PMI was released all gains were erased as the index dropped to 48.3 from 49.6. The significant discrepancy between the official and HSBC data is likely to reignite discussions about the quality of Chinese data.

Final Eurozone March manufacturing PMI was unrevised and stayed at 47.7 from February's 49 and German manufacturing PMI was revised higher to 48.4 from 48.1. The unemployment rate reached a record high in February as it rose to 10.8% from 10.7%. EURUSD has not been able to push above last weeks highs and trades around 1.3355

Concerns that started to surface last week about Spanish economy and about the likelihood that Spain will need financial assistance will probably continue to be on traders' minds as Spanish manufacturing PMI declined further to 44.5 in March from February's 45 and the unemployment rate rose the 23.6%.

Swiss February retail sales declined to 0.8% from 4.7% y/y but SVME PMI rose in March to 51.1 from 49 beating expectations of 49.5. EURCHF continues to trade only a few dozen points above the 1.20 floor.

In the UK, manufacturing PMI exceeded expectations as it rose in March to 52.1 from 51.5 which is the best print in nearly a year. New orders and production rose but costs reached the highest level since 8/2011. UK economy may avoid recession but uncertainty about the economy will persists as hiring is still limited. GBPUSD broke above last week's high and trades around 1.6045.

The US data is limited to ISM manufacturing at 10:00 am ET that is expected to rise in March to 53.3 from previous 52.4.

Markets will also focus on Cleveland FED president and FOMC member Sandra Pianalto who delivers a speech at 12:35 pm and the CAD could experience higher volatility at 12:15 pm when the text of BOC governor Mark Carney's speech is published. The speech itself starts at 12:30 pm and the press conference that follows starts at 2:00 pm.

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Parik Urban