As we have mentioned in the beginning hours of the week, the single currency was under technical pressure after the breaking of 1.341 and the trend line resistance which is extended from 1.2616 to 1.2986 at 1.3463 and it has found the support just above 1.31. The single currency faced resistance yesterday after this bottoming out at 1.3345 because of the weak flash release of the EU HICP of March which has come at just .6% y/y and the market was waiting for .9% this tame inflation pressure can encourage the ECB to cut the interest rate further to stimulate the struggling growth and push the banks to lend again.

We wait later this week for the ECB interest rate decision which is widely expected to be a cut by .5% to be just 1% and the press conference of the ECB president following this decision.

The equity market could close in the green territory yesterday in US with potential worries about the future of the Car making in US and what can come from the G20 meeting in London.

Dow closed at 7608 but heading lower after reaching 7754 in spite of US consuming confidence decline in March to just 26 from 25 in Feb and the weak Chicago PMI figure which came deeply in the contraction territory at 31.4 and the market was waiting for 35 in March. We wait today for the release of March US ISM Manufacturing index which is expected to be 36 from 35.8 in Feb and March ADP employment figure which is expected to be above 600k again at 605k from 697k in Feb. and in the beginning of the European session, we wait for the release of EU Manufacturing PMI figure of March which is expected to be 34 and UK March PMI which is expected to be 35. If we have had surprising weaker manufacturing data today, this can effect negatively on the stocks market and the risk appetite and the prospects of recovery as well.

The Tankan survey of the first quarter came aggressively lower than expected at -58 for the big manufacturing diffusion -31 for the big non manufacturing diffusion and the market was waiting for -55 for the first and just -25 for the second. The data caused volatility brought the USDJPY above 99.30 before pushing it lower than 98.3 and it is now trading at 98.7. Nikkei 225 has opened lower after the data but it had contained the loss and now, it is trading up by 142 points.