Further, the preliminary readings of the US S&P Global PMIs for March came in firmer as the Manufacturing gauge rose to 49.3 from 47.3 in February, versus 47.0 expected, while Services PMI rose to 53.8 from 50.6 prior and 50.5 expected. With this, the S&P Global's Composite PMI increased to 53.3 from 50.1 in February, versus 50.1 market forecasts.
Talking about the central bankers’ comments, On Friday, Atlanta Fed President Raphael Bostic told NPR that it was not an easy decision to raise the policy rate while also adding that he is not expecting economy to fall into recession. "Fed has to get inflation under control,” said Fed’s Bostic.
Further, St. Louis Federal Reserve President James Bullard, a policy hawk, said on Friday that the response to the bank stress was swift and appropriate, allowing the monetary policy to focus on inflation, per Reuters. The policymaker also added that the projections suggest one more rate hike that could be at the next FOMC meting or soon after.
In case of the ECB officials, ECB President Christine Lagarde told EU leaders on Friday that the Euro area banking sector is resilient with strong capital and liquidity positions, Reuters reported citing EU officials. “ECB is determined to bring back inflation to 2%, will decide on future rates based on incoming data,” added ECB’s Lagarde. On the same line was Eurogroup President Donohoe who said that European banks have enough capital and liquidity. Further, ECB policymaker Joachim Nagel said on Friday, “It will be necessary to raise policy rates to sufficiently restrictive levels in order to bring inflation back down to 2% in a timely manner.”
Amid these plays, Wall Street closed with mild gains after the late Friday’s losses while the yields bounce off weekly lows.
Looking ahead, IFO numbers for Germany will joins the comments from the ECB and the Fed officials to direct the EUR/USD pair’s intraday moves. However, major attention will be given to the inflation data from Germany and Europe. On the other hand, the Fed’s preferred inflation gauge, namely the Core Personals Consumption Expenditure (PCE) Price Index, will be important to track for clear direction.
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