We start the new month, already the last of the first quarter of 2015, reflecting on what has been in many respects an extraordinary start to the year. It all kicked off with the move by the SNB in mid-January which sent shockwaves through the FX markets and then continual toing and froing between Greece and the Troika, a drama that is set to continue throughout 2015. FX volatility has spiked and after an initial rise in equity volatility things have been rather calmer in February. The start to this month seems pale in comparison but the first week of any month is busy with a great deal of economic data for investors to digest. Markets have been slowly pricing in a gradual and subtle shift in interest rate expectations with the Federal Reserve becoming a little more dovish meanwhile the Bank of England has been reacting a little more hawkish to the recent better than expected UK economic data. This has lifted GBPUSD back to the 1.5400 level and is a rate to watch, especially as we near the UK General Election.
Overnight the manufacturing and non-manufacturing PMIs from China have come in just higher than expectations, so this should lend a little support to risk assets. This morning sees all the European and UK releases of the manufacturing PMIs so the euro and sterling should be monitored, in particular the euro as inflation data is also released this morning. Later in the day it is the turn of the US to release their manufacturing data but just before then personal consumption and spending should also be monitored for any signs that US consumers are spending and consuming more.