Quarterly growth figures are up for release from the euro zone’s top economy, Germany, and the entire region this week. Any clues from the latest set of data?
German & euro zone flash GDP (Feb. 14, starting 7:00 am GMT)
Will traders show any love for the euro on Valentine’s Day or will the shared currency see a lot of red? It could all depend on how the Q4 2018 GDP readings turn out, and the preliminary growth figure from Germany could set the tone.
A meager 0.1% expansion is eyed, but market watchers seem to be bracing themselves for a downside surprise or another negative figure instead of a slight rebound from the earlier 0.2% contraction. ICYMI, the euro zone’s top dog printed a very dismal retail sales report the other week, followed by a similarly downbeat factory orders figure last week.
If so, the region’s growth report could contain some disappointments as well. Analysts are expecting to get another 0.2% GDP figure from the euro zone, but leading indicators for the other top economies in the bloc also reflect slowing momentum.
Just keep in mind that traders have already set the bar low for euro zone growth figures, especially since the ECB also announced lower forecasts recently, so profit-taking could come in play during the actual release.
Overall market sentiment
There are so many moving parts when it comes to tracking overall market sentiment these days, with the euro and franc also taking advantage of risk-off flows from time to time.
Franc pairs were off to an exciting start as some point to the lower liquidity on account of the Japanese market holiday as the reason for the sharp selloff early in the week. The recovery was just as swift, with traders likely pricing in all the uncertainties in the days ahead.
Sentiment-related factors to keep tabs on include Brexit developments (or the lack thereof), trade talks between the U.S. and China, and budget issues that might lead to another U.S. government shutdown.
Missed last week’s price action? Read the EUR & CHF price review for February 4-8!