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Another round of medium-tier reports is lined up from the euro zone this week. Will these support the ECB’s downbeat outlook?

ECB Governor Draghi’s speech (Jan. 28, 2:00 pm GMT)

Head honcho Draghi was his usual cautious self in the ECB monetary policy statement and presser last week as he admitted that the slowdown could worsen due to geopolitical factors. In particular, he said:

“The risks surrounding the euro area growth outlook have moved to the downside on account of the persistence of uncertainties related to the geopolitical factors and the threat of protectionism, vulnerabilities in emerging markets and financial market volatility.”

There has been some talk about a new Targeted Long-Term Financing Operation, and Draghi also signaled that rates could stay lower for much longer if necessary. When it comes to inflation, he mentioned:

“Headline inflation is likely to decline further over the coming months. Measures of underlying inflation remain generally muted, but labor cost pressures are continuing to strengthen and broaden amid high levels of capacity utilization and tightening labor markets.”

Draghi is once again due to testify about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee and would likely repeat those downbeat remarks.

Still, keep in mind that Draghi also assured that the risk of a recession is low, and this might set the tone for the upcoming GDP and CPI releases from the region’s top economies and the euro zone as a whole.

Flash GDP and CPI readings (starting Jan. 30, 6:30 am GMT)

And now for the actual numbers! Euro traders are keen to find out just how bad the latest set of figures are looking, given that the central bank hasn’t been so jolly about growth and inflation.

Keep in mind that the bar has already been set very low, so any slight upside surprise could send a bit of relief for the shared currency.

First up is the French flash GDP reading on Wednesday’s European trading session, and analysts predict that it could show another 0.3% expansion.  Around the same time, Germany will be printing its GfK consumer climate index, import prices data, and preliminary CPI.

The following day, German retail sales data and French preliminary CPI readings are due. Spain is also scheduled to print its flash GDP and CPI readings then, but the main event might be the aggregate flash GDP release for the region. Expectations are for another 0.2% growth figure, but there is the risk of a downside surprise since the ECB just revised their GDP forecasts lower.

Some say that a negative GDP reading could be a result of a likely contraction in Italy’s economy, which might post another 0.1% dip in growth for the period or worse.

Before the week comes to a close, the region’s flash headline and core CPI readings are due. Slower headline inflation, from 1.6% to 1.4%, and no change in the 1.0% core CPI estimate are eyed.

Low-tier Swiss economic data

The Swiss economy isn’t one to get left behind this time as a handful of low-tier reports are lined up.

First off is the trade balance on Tuesday’s London session, which might post a smaller surplus of 4.55 billion CHF from the previous 4.74 billion CHF. Keep in mind that investors are mindful of any large dips in export activity as this could prompt the SNB to intervene to keep the franc weak.

Next up is the KOF economic barometer due on Wednesday, and analysts are expecting to see a strong improvement from 96.3 to 98.1. This index is based on 219 indicators and gives a preview of how the Swiss economy might fare over the next six months.

Friday has the SECO consumer climate index, which might tick higher from -6 to -5, and the Swiss retail sales report. On a year-over-year basis, consumer spending is expected to have recovered from a 0.5% decline to 0.4% growth in December.

The Swiss manufacturing PMI is also due before the end of the week, but a dip from 57.8 to 56.6 is eyed, reflecting a slower pace of industry expansion. Still, economic data from Switzerland might be poised to show improvements or at least resilience, likely shoring up the franc as a “safe-haven” if risk-off flows return.

Missed last week’s price action? Read the EUR & CHF price review for January 21-25!