The euro was one of the stronger performers in the previous week, ending up in second place and losing only to the Aussie. Any event risks coming up?
Industry PMIs (Apr. 18, starting 7:15 am GMT)
It’s time for another batch of flash PMI readings! Now these numbers from the top euro zone economies, particularly France and Germany, haven’t exactly been on the up and up lately. Another round of declines could signal that the slowdown is far from over.
For France, the services PMI is expected to climb from 49.1 to 49.8 this month, reflecting a slower pace of contraction. Their manufacturing PMI is slated to improve from 49.7 to 50.0, which could suggest a shift to industry expansion. Keep in mind that three out of the last five releases have fallen short of expectations, so there might be a chance of downside surprises.
In Germany, the services PMI likely dipped from 55.4 to 55.0 to show a slower pace of expansion while the manufacturing PMI probably climbed from 44.1 to 45.2 to signal slower contraction. Note that Germany’s manufacturing PMI has landed below consensus in the past five months.
All in all, these could bring the region’s manufacturing PMI from 47.5 to 48.1 and the services PMI from 53.3 to 53.1. These leading indicators tend to shape ECB policy expectations, so it’s helpful to know how the actual numbers turn out even if you don’t plan on trading the news.
Overall market sentiment
There are no major event risks from the Swiss economy once again this week, leaving franc pairs to take their cues from risk sentiment and euro direction.
Keep in mind that it’s a shortened trading week ahead of Holy Week holidays, which also means the possibility of profit-taking before most traders take off.
Missed last week’s price action? Read the EUR & CHF price review for April 8-12.