The dollar significantly weakened against the euro, reaching a minimum of yesterday's session, the cause of which were technical factors, as well as weak US data. The preliminary report submitted at Markit, showed that activity in the US service sector deteriorated sharply in February, reaching a 28-month low and completing the 27-month series of sustainable expansion. Pre-Purchasing Managers Index (PMI) for the services sector fell in February to 49.8 points versus 53.2 points in January. Economists had expected the index to rise to 53.5. Recall index value below 50 indicates contraction in activity in the sector. Respondents reported that the weak growth in new orders and uncertainty were the main cause of the deterioration of the activity of the economic outlook in February. Negative impact also had outages related to the heavy snowfall on the east coast of the country. The data showed that new orders growth slowed for the third consecutive time. Meanwhile, the employment index dropped to the lowest level since the end of 2009. Seasonally adjusted, the composite PMI index was 50.1 points against 53.2 in January.

Another report from the Commerce Department showed that sales of new buildings in the US fell in January to a 10-month high against the background of falling sales in the Western region, but in general the housing market recovery remains intact. Sales fell 9.2 percent to a seasonally adjusted annual rate reached 494,000 units, after a sharp increase in December. December sales rates have not been revised (544,000 units). Economists had forecast that sales of new homes, which account for about 8.3 percent of the housing market, will drop to 520 000 last month. Sales in the West, who noted a sharp increase in housing prices on the background of moderate reserves, fell by 32.1 percent to 110,000, the lowest level since July, 2014. Moreover, the percentage decline was the largest since May 2010. Last month, inventories of new homes on the market increased by 2.1 percent to 238 000 units, the highest level since October 2009. However, the housing is restrained.

The British pound continued to fall today, updating the seven-year low against the dollar. The pressure on the currency has a British exit from the EU perspective. Analysts believe that because of the uncertainty about the upcoming vote, investors will abandon the investment in UK assets. Analysts at HSBC said that voting for a way out of the EU would lead to a further drop in the pound by 15% -20% against the dollar. The Bank believes that the likelihood of such a development of events is equal to one-third.

Little also had the effect of today's data on Britain. British Bankers' Association reported that the number of mortgage approvals increased to 47,509 in January to 43,660 in December. It was the highest since February 2014 and well above the expected level of 45 200 Gross mortgage borrowing rose to 13.6 billion pounds from 12.4 billion pounds. This was 38 percent higher than a year ago and the highest since mid-2008. Borrowing to buy a house amounted to 8.6 billion pounds, compared with 7.7 billion pounds in the last month.

In addition, a quarterly survey from the Confederation of British Industry showed that retail sales balance fell to 10 percent in February. It was predicted drop in the next month to 2 percent, which would be the slowest since May 2013. "In general, conditions remain challenging for retailers - Raine said Newton-Smith, director of economics at the CBI -. While sales continued to grow and increased optimism expectations of sales growth are weak and retailers are still afraid to invest. " However, respondents expect a decent improvement in business conditions within 3 months.

The Swiss franc strengthened against the US dollar, reaching a peak on 16 February that it was due to the widespread weakening of the US currency and the publication of positive data on Switzerland. The results of the poll of investment bank UBS showed that consumer activity indicator rose again at the beginning of the year, mainly led by the improvement in consumer sentiment in the conditions of low oil prices and a marked increase in vehicle registrations. The indicator of consumer activity in Switzerland rose to 1.66 points from 1.61 in December, revised from 1.62, which was reported previously. Thus, the index extended its upward trend in the new year. "Improvement of the UBS indicator of consumer activity sends a positive signal to private consumption, - stated in the UBS bank -. However, unemployment may rise in the first half of this year, in response to the slowdown in GDP growth last year, thus holding back private consumption . " Investment bank UBS expects the labor market to recover in the second half of the year, which can lead to an increase in private consumption of 1.4 percent this year.

The Australian Bureau of Statistics released its wage price data on Wednesday. Wages in Australia rose at a seasonally adjusted rate of 0.6% in the fourth quarter, missing forecasts of a 0.6% gain, after a 0.6% increase in the previous quarter.

Both public and private wages increased 0.5% in the fourth quarter.

On a yearly basis, wages climbed 2.2% in the fourth quarter, missing expectations for a 2.3% increase, after a 2.3% gain in the third quarter.

On a yearly basis, private wages were up 2.0% in the fourth quarter, while public wages jumped 2.6%.

The Australian Bureau of Statistics released its construction work done figures on Wednesday. Construction work done in Australia dropped 3.6% in the fourth quarter, missing forecasts of a 2.0% fall, after a 1.8% decrease in the previous quarter. The third quarter's figure was revised up from a 3.6% decline.

The seasonally adjusted estimate of total building work done rose 2.7% in the fourth quarter, while engineering work slid 9.5%.

On a yearly basis, total construction work plunged 4.3% in the fourth quarter.

European Central Bank (ECB) Governing Council member and Deutsche Bundesbank President Jens Weidmann said Wednesday that the economic recovery would continue this year.

"The euro area's gradual economic recovery is likely to continue in the rest of this year and in 2017," he said.

Weidmann noted that the German economy was in good shape.

"While wage growth was marked, inflation remained subdued; this led to a distinct rise in real disposable income," Bundesbank president added.

Weidmann warned that further stimulus measures could entail longer-term risks and side-effects "that it would be dangerous to simply ignore".

Richmond Fed President Jeffrey Lacker said in a speech on Wednesday that interest rate hikes are still possible this year. He noted that the Fed's federal-funds rate, adjusted for inflation, was below the natural rate.

"In fact, this perspective would bolster the case for raising the federal funds rate target," Lacker said.

He pointed out that the monetary policy's effect on real economic activity was limited and temporary.

Lacker is not a voting member of the Federal Open Market Committee (FOMC) this year.

Kansas City Fed President Esther George said in an interview with Bloomberg Radio on Tuesday that the Fed should consider to raise its interest rate at its monetary policy meeting in March.

"It absolutely should be on the table," she said.

Kansas City Fed president added that there was no fundamental shift in the outlook.

George is a voting member of the Federal Open Market Committee (FOMC) this year.

The U.S. Commerce Department released new home sales data on Wednesday. New home sales slid 9.2% to a seasonally adjusted annual rate of 494,000 units in January from 544,000 units in December.

Analysts had expected new home sales to reach 520,000 units.

The decrease was mainly driven lower sales in the West region. New home sales in the West region plunged 32.1% in January.

Markit Economics released its preliminary services purchasing managers' index (PMI) for the U.S. on Wednesday. The U.S. preliminary services purchasing managers' index (PMI) dropped to 49.8 in February from 53.2 in January. It was the lowest level since October 2013.

Analysts had expected the index to rise to 53.5.

A reading below 50 indicates contraction in economic activity.

The drop was driven by a softer growth in new work, the slowest since late-2009.

"The PMI survey data show a significant risk of the US economy falling into contraction in the first quarter. The flash PMI for February shows business activity stagnating as growth slowed for a third successive month. Slumping business confidence and an increased downturn in order book backlogs suggest there's worse to come," Markit Chief Economist Chris Williamson said.

Japan's Cabinet Office released its final leading index data on Wednesday. The leading index decreased to 102.1 in December from 103.2 in November, up from the preliminary estimate of 102.0. It was the lowest level since January 2013.

November's figure was revised down from 103.5.

Japan's coincident index was down to 110.9 in December from 111.9 in November, down from the preliminary reading of 111.2.

USD/JPY: 110.10 (USD 205m) 112.00 (USD 135m) 114.00 (284m) 115.00 (245m)

EUR/USD: 1.0800-15 (EUR 1.8bln) 1.0900 (383m) 1.1000 (425m) 1.1010-15 (361m) 1.1025-35 (1.1bln) 1.1050 (744m) 1.1075 (198m) 1.1140-50 (877m) 1.1190-112.00 (551m) 1.1250 (2.03bln)

EUR/GBP 0.7750 (EUR 777m)

AUD/USD: 0.6950 (AUD 151m) 0.7050 (290m) 0.7150 (425m) 0.7200 (191m)

USD/CAD 1.3500 (USD 600m) 1.3950 (570m)

USD/CNY 6.5000 (1.97bln) 6.55 (1.47bln)

The Confederation of British Industry (CBI) released its retail sales balance data on Wednesday. The CBI retail sales balance plunged to +10% in February from +16% in January. It was the lowest level since May 2013.

Sales growth is expected to slow next month, while orders are expected to decline.

"Overall, conditions remain challenging for retailers. Although sales have continued to grow and optimism has risen, expectations for sales growth are lacklustre and retailers are still wary of investing," CBI Director of Economics, Rain Newton-Smith, said.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

00:30 Australia Wage Price Index, q/q Quarter IV 0.6% 0.6% 0.5%

00:30 Australia Wage Price Index, y/y Quarter IV 2.3% 2.3% 2.2%

00:30 Australia Construction Work Done Quarter IV -1.8% Revised From -3.6% -2% -3.6%

05:00 Japan Leading Economic Index (Finally) December 103.2 102 102.1

05:00 Japan Coincident Index (Finally) December 111.9 110.9

07:00 Switzerland UBS Consumption Indicator January 1.61 Revised From 1.62 1.66

07:45 France Consumer confidence February 97 97 95

09:30 United Kingdom BBA Mortgage Approvals January 43.66 Revised From 43.98 45.2 47.5

12:00 U.S. MBA Mortgage Applications February 8.2% -4.3%

The U.S. dollar traded mixed to higher against the most major currencies ahead of the release of the U.S. economic data. The preliminary U.S. services PMI is expected to rise to 53.5 in February from 53.2 in January.

New home sales in the U.S. are expected to decline to 520,000 units in January from 544,000 units in December.

The euro traded lower against the U.S. dollar in the absence of any major economic data from the Eurozone.

French statistical office INSEE released its consumer confidence index for France on Wednesday. French consumer confidence index fell to 95 in February from 97 in January. Analysts had expected the index to remain unchanged at 97.

The British pound traded lower against the U.S. dollar on the possible Britain's exit from the European Union.

The British Bankers' Association (BBA) released the number of mortgage approvals in the U.K. on Wednesday. The number of mortgage approvals rose to 47,509 in January from 43,660 in December, exceeding expectations for a rise to 45,200. It was the highest level since February 2014.

The Confederation of British Industry (CBI) released its retail sales balance data on Wednesday. The CBI retail sales balance plunged to +10% in February from +16% in January.

The Swiss franc traded mixed against the U.S. dollar. UBS released its consumption index for Switzerland on Wednesday. The UBS consumption index increased to 1.66 in January from 1.61 in December. December's figure was revised down from 1.62. The increase was driven by an improved business sentiment in the retail sector.

EUR/USD: the currency pair decreased to $1.0956

GBP/USD: the currency pair dropped to $1.3877

USD/JPY: the currency pair fell to Y111.72

The most important news that are expected (GMT0):

14:45 U.S. Services PMI (Preliminary) February 53.2 53.5

15:00 U.S. New Home Sales January 544 520

15:30 U.S. Crude Oil Inventories February 2.147 3.165

17:50 Canada BOC Deputy Governor Lawrence Schembri Speaks

18:10 United Kingdom BOE Deputy Governor for Financial Stability Jon Cunliffe speaks

EUR/USD

Offers: 1.1020 1.1035 1.1050 1.1080 1.1100 1.1120 1.1135 1.1150

Bids: 1.0985 1.0965 1.0950 1.0920 1.0900 1.0880 1.0860 1.0830 1.0800

GBP/USD

Offers: 1.4020-25 1.4050 1.4080 1.4100 1.4120 1.4135 1.4150-55 1.4180 1.4200

Bids: 1.3950-55 1.3925-30 1.3900 1.3885 1.3865 1.3850

EUR/JPY

Offers: 123.30 123.50 123.80 124.00 124.50 124.75 125.00 125.50 126.00

Bids: 122.75-80 122.50 122.30 122.00 121.50 121.00

EUR/GBP

Offers: 0.7830-35 0.7885 0.7900 0.7925 0.7950

Bids: 0.7850 0.7830-35 0.7800 0.7785-90 0.7765 0.7750

USD/JPY

Offers: 112.20-25 112.50 112.80 113.00 113.20-25 113.40 113.65 113.85 114.00

Bids: 111.80 111.65-70 111.50 111.30 111.00 110.80 110.50 110.30 110.00

AUD/USD

Offers: 0.7220 0.7250 0.7265 0.7285 0.7300 0.7320 0.7350

Bids: 0.7180-85 0.7160 0.7140-45 0.7120 0.7100

The National Bank of Belgium (NBB) released its business survey on Tuesday. The business climate dropped to -6.6 in February from -3.0 in January. Analysts had expected the index to decline to -3.6.

2 of 4 indicators dropped in February, while 2 indicators rose.

The business climate index for the manufacturing sector fell to -11.2 in February from -6.3 in January due to a less favourable assessments of total order books.

The business climate index for the services sector was up to 10.5 in February from 10.2 in January due to a more favourable assessment of the current activity.

The business climate index for the building sector slid to -4.1 in February from 0.5 in January due to a downward revision of all the demand-side components.

The business climate index for the trade sector increased to -5.1 in February from -8.6 in January due to more positive demand expectations.

The Italian statistical office Istat released its industrial orders data for Italy on Wednesday. Industrial orders in Italy declined at a seasonally adjusted rate of 2.8% in December, after a 1.5% rise in November. November's figure was revised down from a 1.6% gain.

Domestic orders slid 4.8% in December, while non-domestic orders were up 0.2%.

On a yearly basis, the unadjusted industrial orders in Italy rose 1.5% in December, after a 12.1% rise in November.

The seasonally adjusted industrial turnover in Italy fell 1.6% in December, after a 1.1% decrease in November.

Domestic turnover decreased 1.7% in December, while non-domestic turnover plunged 1.4%.

On a yearly basis, the adjusted industrial turnover in Italy declined 3.0% in December, after a 0.8% increase in November.

The British Bankers' Association (BBA) released the number of mortgage approvals in the U.K. on Wednesday. The number of mortgage approvals rose to 47,509 in January from 43,660 in December, exceeding expectations for a rise to 45,200. It was the highest level since February 2014.

December's figure was revised up from 43,979.

"The start of the year has seen a significant rise in mortgage borrowing. It seems that this has been driven, in part, by borrowers looking to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect in April," the chief economist at the BBA, Richard Woolhouse, said.

French statistical office INSEE released its consumer confidence index for France on Wednesday. French consumer confidence index fell to 95 in February from 97 in January. Analysts had expected the index to remain unchanged at 97.

The index of the outlook on consumers' saving capacity rose to -5 in February from -6 in January.

The index of households' assessment of their financial situation in the past twelve months declined to -25 in February from -24 in January.

The index of the outlook on consumers' financial situation for next twelve months decreased to -10 in February from -8 in January.

The index of the outlook on unemployment rising in coming months climbed to 46 in February from 33 in January.

The index for future inflation expectations was down to -38 in February from -39 in January.

UBS released its consumption index for Switzerland on Wednesday. The UBS consumption index increased to 1.66 in January from 1.61 in December. December's figure was revised down from 1.62.

The increase was driven by an improved business sentiment in the retail sector.

The bank noted that the outlook for retail remained subdued.

"The improvement of the UBS Consumption Indicator sends a positive signal for private consumption. However, unemployment could rise in the first half of the year as a delayed response to last year's weaker GDP growth, thereby dampening private consumption," the bank said.

The bank noted that private consumption could rise 1.4% in 2016, driven by the labour market recovery in the second half of the year.

USD/JPY: 110.10 (USD 205m) 112.00 (USD 135m) 114.00 (284m) 115.00 (245m)

EUR/USD: 1.0800-15 (EUR 1.8bln) 1.0900 (383m) 1.1000 (425m) 1.1010-15 (361m) 1.1025-35 (1.1bln) 1.1050 (744m) 1.1075 (198m) 1.1140-50 (877m) 1.1190-112.00 (551m) 1.1250 (2.03bln)

EUR/GBP 0.7750 (EUR 777m)

AUD/USD: 0.6950 (AUD 151m) 0.7050 (290m) 0.7150 (425m) 0.7200 (191m)

USD/CAD 1.3500 (USD 600m) 1.3950 (570m)

USD/CNY 6.5000 (1.97bln) 6.55 (1.47bln)

The Fed Vice Chairman Stanley Fischer said on Tuesday that the economic growth in the U.S. picked up in the first quarter.

"The spending indicators that we have in hand for January point to a pickup in economic growth this quarter," he said.

Fischer noted that a tightening of financial conditions could mean a slowdown in the global economy that could have a negative impact on the economic growth and inflation in the U.S.

"If the recent financial market developments lead to a sustained tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States," the Fed vice chairman said.

He said nothing new about further interest rate hikes.

Germany's Deutsche Börse is in talks to merge with the London Stock Exchange (LSE). It would be a £21bn deal. In case of a successful merger, Deutsche Börse shareholders will own 54.4% of the combined company, while LSE shareholders will hold 45.6%.

Both companies expect to strengthen their market position, to generate extra revenues and to save costs.

The U.S. Federal Deposit Insurance Corporation (FDIC) said on Tuesday that the U.S. banks' aggregate net income increased by 11.9% year-on-year to $40.8 billion in the fourth quarter. The rise was mainly driven by an increase in net operating revenue and a fall in noninterest expenses.

World Bank released its European Union Regular Economic Report (EU RER) on Tuesday. The bank said that the economy in the European Union (EU) continued to improve in 2015. The growth is estimated to be 2% in 2015.

Central Europe showed the highest growth, driven by the Czech Republic, Poland, and Romania, while Southern Europe expanded 1.4% in 2015, driven by an improvement in labour markets.

"The story in the region is positive. Unemployment rates are reaching pre-crisis levels in many EU countries and unemployment among the young - who suffered the largest increase in poverty during the crisis - is finally declining," World Bank Lead Economist and co-author of the latest report, Doerte Doemeland, said.

Minneapolis Federal Reserve President Neel Kashkari said on Tuesday that he expected the U.S. economy to expand moderately.

"The moderate economic outlook is still the base case for the U.S.," he said.

Kashkari noted that further labour market improvement could lead to a rise in wages.

Kashkari is not a voting member of the Federal Open Market Committee (FOMC) this year.

EUR / USD

Resistance levels (open interest**, contracts)

$1.1219 (4273)

$1.1141 (3955)

$1.1082 (5190)

Price at time of writing this review: $1.1009

Support levels (open interest**, contracts):

$1.0932 (7045)

$1.0870 (7017)

$1.0831 (3496)

Comments:

- Overall open interest on the CALL options with the expiration date March, 4 is 66670 contracts, with the maximum number of contracts with strike price $1,1000 (5190);

- Overall open interest on the PUT options with the expiration date March, 4 is 92033 contracts, with the maximum number of contracts with strike price $1,1000 (7045);

- The ratio of PUT/CALL was 1.38 versus 1.41 from the previous trading day according to data from February, 23

GBP/USD

Resistance levels (open interest**, contracts)

$1.4303 (1458)

$1.4205 (375)

$1.4108 (358)

Price at time of writing this review: $1.4011

Support levels (open interest**, contracts):

$1.3893 (1401)

$1.3796 (409)

$1.3698 (174)

Comments:

- Overall open interest on the CALL options with the expiration date March, 4 is 27895 contracts, with the maximum number of contracts with strike price $1,4650 (1652);

- Overall open interest on the PUT options with the expiration date March, 4 is 29241 contracts, with the maximum number of contracts with strike price $1,4350 (2954);

- The ratio of PUT/CALL was 1.05 versus 1.03 from the previous trading day according to data from February, 23

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Economic calendar (GMT0):

Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

00:30 Australia Wage Price Index, q/q Quarter IV 0.6% 0.6% 0.5%

00:30 Australia Wage Price Index, y/y Quarter IV 2.3% 2.3% 2.2%

00:30 Australia Construction Work Done Quarter IV -1.8% Revised From -3.6% -2% -3.6%

05:00 Japan Leading Economic Index (Finally) December 103.2 102 102.1

05:00 Japan Coincident Index (Finally) December 111.9 110.9

The pound extended declines amid fears of the U.K.'s exit from the European Union. Moody's warned that the country's rating could be revised in case it leaves the union. Some economists believe that U.K. exit would result in capital outflows and weaker economic growth. A referendum on EU membership will be held on June 23.

The Australian dollar fell on weak domestic data. The wage price index rose by 0.5% in the fourth quarter, while economists had expected it to grow by 0.6%. The index rose by 2.2% y/y marking the slowest growth pace since the index series was launched in 1998. Meanwhile the index of construction work done fell by 3.6% in Q4. Analysts had expected a more modest decline of 2.0%. The third quarter reading was revised to -1.8% from -3.6%.

The yen rose against the U.S. dollar amid growing demand for safe-haven assets, which was triggered by renewed declines in oil prices. Oil prices dropped after Saudi oil minister Ali Al-Naimi clearly said that his country will not implement production cuts, because there is no trust that other producers will follow its example.

EUR/USD: the pair fluctuated within $1.0000-25 in Asian trade

USD/JPY: the pair fell to Y111.65

GBP/USD: the pair fell to $1.3965

The most important news that are expected (GMT0):

(time / country / index / period / previous value / forecast)

07:00 Switzerland UBS Consumption Indicator January 1.62

07:45 France Consumer confidence February 97 97

09:30 United Kingdom BBA Mortgage Approvals January 43.98 45.2

12:00 U.S. MBA Mortgage Applications February 8.2%

14:45 U.S. Services PMI (Preliminary) February 53.2 53.5

15:00 U.S. New Home Sales January 544 520

15:30 U.S. Crude Oil Inventories February 2.147 3.165

21:45 New Zealand Visitor Arrivals January 10.5%

(pare/closed(GMT +2)/change, %)

EUR/USD $1,1029 +0,09%

GBP/USD $1,4021 -0,91%

USD/CHF Chf0,9911 -0,85%

USD/JPY Y112,09 -0,71%

EUR/JPY Y123,51 -0,82%

GBP/JPY Y157,15 -1,62%

AUD/USD $0,7200 -0,36%

NZD/USD $0,6640 -0,86%

USD/CAD C$1,3792 +0,64%