Week in FX Europe – It Does Not Get any Easier For EUR Next Week

Enjoy this weekend and get some rest, as next week is a new month littered with central bank rate announcements, ending with the ‘granddaddy’ of economic indicators, the US non-farm payroll report. If none of the above releases ‘tickle your fancy’ investors will still have a lot of rhetoric to chew on before deciding on what asset class they wish to covet in the short term.

Draghi and company are expected to keep key interest rates on hold after the -25bp cut in May. The market risk however is that policy makers may be forced to ease monetary policy further, as early as July, if the Euro-region fails to improve or if benign inflation remains too low for too long. Analyst seem to agree if that is the situation, then another -25bp cut in the refi rate would be the most likely approach.

Other data on show will be the second and final reading of the composite purchasing managers index – the release is expected to be unrevised from the preliminary release – revealing a “mildly slower pace of contraction across the private sector.”

On more of the downbeat side of things will be the Euro-zone retail sales (-0.2%), German manufacturing orders (-1%) and production numbers (+0.0%).

Finishing the week will be the detailed Euro-zone GDP release for Q1. This report is expected to confirm that the quarter’s fall in activity was very much reflected as a “broad-based weakness.”

Now that investors have finished with last month-end portfolio rebalancing requirements perhaps this market can get back to trading technical and fundamental data again.

 

WEEK AHEAD

* USD ISM Manufacturing
* AUD Reserve Bank of Australia Rate Decision
* AUD Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product
* GBP Bank of England Rate Decision
* GBP BOE Asset Purchase Target
* EUR European Central Bank Rate Decision
* EUR ECB Deposit Facility Rate
* USD Unemployment Rate
* USD Change in Non-farm Payrolls
* CAD Unemployment Rate

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

Latest posts by Dean Popplewell (see all)