• Chinese factory activity reduces for the third month in a row with Caixin/Markit Manufacturing PMI at 49.9 for February. A reading above 50 shows expansion
• Rolls-Royce announces a pre-tax loss of £2.9billion for 2018, after a profit of £3.89billion in the previous year
• Minister George Eustice quits the government in relation to Theresa May’s promise allowing MPs to vote on delaying Brexit, if the deal is rejected
• Asia stocks slightly higher with the Hang Seng higher by 0.45 percent, Nikkei 225 increasing 1.14 percent and ASX 200 by 0.46 percent
• US GDP beats expectations as results showed the US economy growing at an annualized rate of 2.6 percent in the last quarter of 2018. Although this showed a positive result, Dow Jones Industrial Average fell 69.16 points, along with the S&P 500 and Nasdaq Composite declining around 0.3 percent
• MSCI to quadruple the weighting of Chinese mainland shares which could attract over $80billion of new foreign inflows
• Pakistan to release Indian pilot as a gesture of peace, however, Indian military officials declined to confirm whether they will de-escalate the conflict

Asian overnight: Asian markets traded higher overnight, with particular focus being placed on Chinese shares after MSCI tripled it’s weighting for Chinese shares within their flagship emerging markets index. This is expected to greatly increase demand for ‘A-shares’ when implemented next-August.

UK, US and Europe: Market on the whole had been relatively downbeat, despite the better than expected US GDP number yesterday. However, there is a hope that this optimism shown through the overnight session will impact sentiment closer to home. A host of data-points are being released throughout the day, yet markets will be paying particular attention to a few choice figures. In Europe, keep an eye out for the UK manufacturing PMI figure, alongside the eurozone CPI inflation reading. Meanwhile, markets will also keep a close eye out for proceedings in Italy, as the government plans to lay out their contravertial budget. While US markets will be watching for the latest core PCE price index, and ISM manufacturing PMI figure.

Economic calendar - key events and forecast (times in GMT)

Source: Daily FX Economic Calendar

8am – 9am – French, German, eurozone PMIs (February, final): downward revisions to these may put pressure on the euro. Market to watch: EUR crosses
8.55am – German unemployment (February): unemployment rate to hold at 5%. Market to watch: EUR crosses
9.30am – UK mfg PMI (February): index to fall to 52.5 from 52.8. Market to watch: GBP crosses
10am – eurozone CPI (January, flash): YoY CPI to be 1.5%, and core 1.1%. Market to watch: EUR crosses
10am – Italy government presents Budget: the budget argument between Rome and Brussels goes on, and if this budget suggests higher spending in Italy we may see a fresh round of disagreement. Market to watch: EUR crosses
1.30pm – Canada GDP (Q4): QoQ rate to be 0.4% from 0.5%. Market to watch: CAD crosses
1.30pm – US personal spending (December): expected to rise 0.1% MoM from 0.4%. Market to watch: USD crosses
3pm – US ISM mfg PMI (February): forecast to fall to 56.2 from 56.6. Markets to watch: US indices, USD crosses

Corporate News, Upgrades and Downgrades

• William Hill posted a pre-tax loss for the year, with the firm blaming it on a £882.8 million noncash impairment leveraged on their retail business in the wake of recent UK regulatory changes. Before this charge, the firm had seen a rise in revenues, from £1.59 billion, to £1.62 billion
• Rightmove saw profits rise to £198 million last year, up from £178 in 2017. The firm has managed to continue raising their average revenue per advertiser number, while now stands at £1,005. The firm saw greater traffic, and revenues, despite the widely perceived slowdown in the UK housing market
• WPP expects organic growth to fall 2% in 2019, with the firm in the midst of a three-year turnaround project in the wake of Martin Sorrell’s departure. The firm saw a 0.4% fall in underlying net sales in 2018, with the figure expected to be closer to 2% in 2019
• Tesla to finally launch the Model 3 which will start off at $35,000, however, Musk believes they will not turn a profit until the second quarter

B&M European Upgraded to Top Pick at RBC
Genel Upgraded to Outperform at BMO
Keywords Studios Rated New Buy at Liberum
Team17 Rated New Buy at Liberum

Rio Tinto Downgraded to Hold at DZ Bank
Fresnillo Cut to Underperform at Macquarie
Sumo Rated New Sell at Liberum
Privanet Downgraded to Sell at Inderes
 

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