(MENAFN– ecpulse) With the release of United Kingdom’s inflation and euro-area’s ZEW confidence reports in the previous session, investors focus will shift to inflation figures out from the currency block and unemployment in the royal economy.
Final Eurozone inflation data to grab heavy attention:
In the 18-nation using the European common currency, the main focus will be on annual Consumer Price Index (CPI) for the year ending March as expectations refer that the rate lingered at 0.5 percent to remain sharply below the bank`s 2% target.
The ECB`s latest concern was focused on inflation, ECB’s President Mario Draghi said over the weekend that any further rise in the euro exchange rate would trigger additional monetary easing to keep inflation from falling too low, though he didn`t give a specific level that would trigger ECB action.
If the central bank decides to act, possible steps include a negative rate on bank deposits parked overnight at the central bank which would likely weaken the euro by making euro-denominated assets less attractive to investors.
In the UK, situation isn’t much better where data released yesterday showed inflation resumed its drop below the Bank of Englan’s 2 percent target in March to raise concerns low inflation may hamper recovery.
Falling inflation rates after a long period of high inflation is expected to be seen by some economists as a reason to further delay expectations of the first UK rate hike. Annual CPI retreated to 1.6 percent in March- the lowest level since October 2009.
UK unemployment rate seen falling in February:
A report later in the day may show UK ILO unemployment for the three months through February dipped to 7.1 percent from a prior of 7.2 percent. While jobless claims for March probably dropped 30,000 in March after falling 34,600 a month earlier.
Rapid declines in the jobless rate have forced the central bank to abandon its guidance of 7 per cent for considering an interest rate rise. It is now focusing on a wider range of indicators of spare capacity in the economy.
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