European Open: How is Europe growth looking?


European growth forecasts on tap

The European Commission is scheduled to release its economic growth forecasts for the region today, and those will likely determine the direction for the Euro in the near term. While data has been showing some improvement over the past few months, Brexit and now the coronavirus outbreak are factors which could prompt a less-optimistic outlook.

Ahead of the release we will hear speeches from ECB’s Lagarde and De Guindos. Let’s see if they are all on the same wavelength.


Coronavirus update

Fitch Ratings came out and stated the obvious early this morning by highlighting that the coronavirus outbreak would damp China’s economic growth this year. It stated that the extent of the impact remains uncertain, depending on the duration and intensity of the health crisis, and so did not give any revised forecasts.

The latest data on the coronavirus showed a spike in numbers overnight to 28,296 cases currently, with 565 associated deaths. The deaths remain primarily in mainland China, with still the one in the Philippines and one in Hong Kong the only reported deaths outside the Chinese borders (Source: John Hopkins University).

We are approaching the time when the 14-day period of the first city lockdowns expires and many are hoping to see a tailing off in the number of new cases and deaths to prove that containment and isolation is helping to curb the virus’s spread. If that isn’t the case, then we could see a reversal in the risk-positive activity.


Oil extends gains

The better-than-expected US data yesterday helped the rebound in oil prices yesterday, with ongoing fears about OPEC production cuts to stem the oil price decline adding to the mix.

West Texas Intermediate (WTI) jumped the most in two months yesterday, rebounding from 13-month lows, and extended gains into today which saw prices hit the highest this week.

Weekly oil stockpiles data from the Energy Information Administration showed an increase of 3.36 million barrels in the week to January 31. It was more than the surveys suggested, but below the previous week’s level of +3.55 million barrels.


WTI Daily Chart

Source: OANDA fxTrade


Minor US data flows

Q4 unit labour costs and nonfarm productivity fill up the US calendar along with a speech from Fed’s Kaplan. Labour costs are seen easing to +1.3% from +2.5% in Q3.


The full MarketPulse data calendar can be viewed at



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.

Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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