Inflation could be front and center for the euro zone this week as top economies are scheduled to print preliminary figures. The Swiss economy has a handful of reports due as well.
Preliminary euro zone CPI readings (Feb. 28 & 29)
It might be a bit of a slow start for the shared currency this week as economic reports won’t be rolling in until Thursday’s London trading session.
Germany’s import prices data and preliminary CPI reading will kick things off, with the latter projected to rebound from the earlier 0.8% drop to show a 0.5% increase.
France will also be releasing its flash CPI reading soon after, likely posting a 0.4% recovery after the earlier 0.4% decline. The country’s preliminary GDP figure is also lined up and another 0.3% expansion is eyed for Q4 2018.
A few minutes later, Spain and Italy will print its preliminary CPI figures and could report a 1.1% gain and 0.2% uptick respectively.
All these should factor in the region’s overall flash headline and core CPI readings due later in the week. The former could tick higher from 1.4% to 1.5% in February on account of stronger oil prices while the latter is expected to hold steady at 1.1%.
Stronger than expected results could provide a bit of support from the euro and ease speculations that the ECB might be looking to revive its asset purchase program. On the flip side, another set of disappointments could reinforce dovish expectations and drag the shared currency south.
Medium-tier Swiss data (starting Feb. 28)
Seeing economic reports from Switzerland is pretty rare and, even though these releases don’t normally spur a huge reaction from the franc, they’re worth keeping tabs on to gauge if the SNB might budge soon.
First up is the Q4 2018 GDP due on Thursday’s London session. Analysts are expecting to see a 0.4% growth figure after the previous 0.2% contraction, and a stronger than expected read could stoke demand for the Swiss currency.
Swiss retail sales and manufacturing PMI from Procure are up for release on Friday. Consumer spending is likely to post a 0.3% rebound for January after the earlier 0.3% decline, but the manufacturing PMI could slip from 54.3 to 53.8 for February.
Risk sentiment & dollar action
As in the previous weeks, the euro and the franc could stay sensitive to market sentiment, which has mostly been dictated by trade tensions lately.The situation appears to have improved, though, with talks of a potential extension of the March 1 tariffs deadline and a likely meeting between Trump and Xi soon.
Between the U.S. and the euro zone, however, there seems to be some bad blood on auto tariffs as the latter vowed to retaliate if higher levies on the likes of BMW, Volkswagen, Audi, and Mercedes-Benz.
Other matters to watch out for are the U.S. advanced GDP reading and of course good ol’ Brexit which affect euro and franc trading one way or another.
Missed last week’s price action? Read the EUR & CHF price review for February 18-22!