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Euro and franc price action diverged in the previous week, with the Swiss currency leading the pack. Will we see the same case this time around?

Euro zone flash PMIs (May 23, starting 7:15 am GMT)

It’s time for another round of flash PMI readings from the region’s top dawgs! France will get the ball rolling with its manufacturing and services PMIs, with the former projected to tick higher from 50.0 to 50.1 and the latter expected to rise from 50.5 to 50.7.

Germany’s numbers might paint a mixed picture, though. The flash manufacturing PMI is slated to improve from 44.4 to 44.9 to reflect a slightly slower pace of contraction, but the services PMI could dip from 55.7 to 55.2 to signal slower growth.

All in all, this should bring the region’s flash manufacturing PMI up from 47.9 to 48.2 and the flash services PMI up from 52.8 to 53.0. Weaker than expected results, however, could remind market watchers that the slowdown is far from over.

ECB monetary policy meeting accounts (May 23, 11:30 am GMT)

The central bank rescheduled the release of their policy minutes by a couple of weeks from the original May 8 schedule. Just the same, these could provide clues on what their moves next month might be.

This transcript is for their April statement, during which the ECB decided to keep monetary policy unchanged as expected. During the press conference, head honcho Draghi acknowledged that incoming data has been weak and that “slower growth momentum is expected to extend into the current year.”

Although Draghi also assured that the probability of a recession in the euro zone remains low, the transcript of their huddle should reveal whether or not other ECB members are on the same boat.

Recall that the ECB slashed their economic projections in the previous month and pushed back their forward guidance to signal that stimulus remains appropriate.

European parliamentary elections (May 23-25)

A bit of uncertainty is also hanging over the euro in the form of the upcoming European parliamentary elections later this week. In particular, traders are keeping tabs on the rise of the populist vote and how this could impact EU legislation in the longer run.

The likes of Italian deputy prime minister Salvini and France’s Le Pen are hoping to bag a record number of seats in parliament in order to give the far-right a more powerful say in the bloc.

So far, polls are indicating that this alliance could be the fourth-largest group in parliament. Although this event isn’t really expected to spur large moves in the charts, it’s worth noting how European stock markets react to the outcome and what this might imply for the region’s future.

Overall market sentiment

As in the past few weeks, risk sentiment influenced mainly by trade concerns has been a major driving force for both the euro and the franc.

While the franc managed to score most of the safe-haven bids on elevated tensions during the latter part of the previous week, the shared currency was unable to join the rallies as weaker German investor morale and Italy’s rising deficit grabbed the spotlight.

Another risk-related factor worth watching, particularly for the euro, is the Brexit drama which doesn’t seem to be taking a good turn these days.

For now, the shared currency may have gotten a bit of relief from the delay in auto tariffs. Still, any confirmation that both the U.S. and China are prepping to fire more warning shots or actual tariffs at each other could allow these European currencies to steal some safe-haven flows away from the dollar.

Missed last week’s price action? Read the EUR & CHF price review for May 13-17!