This week is an important one for the Euro in terms of news events. The EUR could have a rocky week and it all comes to a head on Thursday when the European Central Bank (ECB) holds a press conference on Friday.
Monday
This week begins for the Euro with the Money Supply (M3) at 08:00 GMT which is expected to be the same as last month at +0.8% from a year ago. At the same time Private Loans year on year are expected to fall by -1.6, up from -1.8 a month ago. The real fireworks will kick off an hour later when the CPI Flash Estimate comes out. It is expected to show inflation stayed the same as a month ago at +0.5% year on year, however, this monthly report has only impressed the market twice since April 2013 so don’t expect an upside movement. If it is disappointing it will add to the speculation the ECB will add to June’s stimulus.
Expected movement: Bearish
Tuesday
The Unemployment Rate due at 09:00 has been one of the few reports that has been trending in the Euro’s favour. Coming off the high of 12.2% in October last year, it has consistently fallen to the current 11.7% where it is expected to stay this month. But given the trend, we could well see some positive news for the Euro this week.
Expected movement: Bullish
Wednesday
Wednesday is the calm before the storm with Final GDP for the quarter ending March due at 09:00 GMT. There are 3 versions of GDP released about a month apart - Flash, Revised, and Final. The Flash release is the earliest and thus tends to have the most impact. The Final figure is the most accurate, but has little impact. At the same time the PPI for May will be released. This is not a high impact report as France and Germany have already released their PPI reports for May, therefore the market knows roughly what to expect.
Expected movement: Neutral
Thursday
This is the day to watch for the Euro. Kicking off at 08:00 GMT is the Final Services PMI, which is not expected to have an impact as it is confirmation of a previously reported figure of 52.8 released last week. At 09:00 monthly Retail Sales figures are expected to show sales rose just 0.3% in June, down from 0.4% a month ago. This gives the market an indication of how consumers view the current economic climate. At 11:45 the Minimum Bid Rate is announced by the ECB, this is the main Interest rate, whichwas reduced to 0.15%as part of the stimulus package the ECB releasedin early June. It is not expected to change, but if it does, it will not be up and neither will the Euro be. There has been mounting speculation in the market that the ECB will need to add further stimulus and we will find out if they will at the ECB Press Conference at 12:00 GMT. There have been calls for a Quantitative Easing (QE) programme and any talk of this will weigh heavily on the Euro.
The carnage continues on Friday with the US Nonfarm Payroll data at 12:30, which is the biggest event in the market’s monthly calendar and will provide plenty of volatility for the EURUSD cross. The US has been adding over 200k jobs per month and beating expectations along the way. This month the market expects 210k jobs added in June, however, this could be exceeded given the recent trend.
Expected movement: Rollercoaster
Friday
The news thins out on Friday as the Euro eases into the weekend. Only the Retail PMIbeing released at 08:10 GMT which has been struggling to stay over 50 (meaning expansion) so could well fall again.
Expected movement: Bearish
The Euro has a big week ahead and it could easily be a negative one for the joint currency. The ECB and US Nonfarm will provide the biggest movements, however the lesser news events could also provide opportunities.