Both the euro and franc had a mixed run in the previous week, but will the upcoming catalysts set a clearer course? Here’s what to look out for.
ECB head Draghi’s speeches
ECB Overlord Draghi has a pretty busy week ahead as his schedule has a handful of speaking engagements lined up. First up is his opening remarks at the ECB Forum on Central Banking in Portugal on Monday’s London trading session.
He has another testimony scheduled in the same event the following day, then followed by closing remarks on Wednesday. No audience questions are expected, but market watchers are likely to keep their eyes and ears peeled for any policy-related hints… so you should, too!
Euro zone PMI readings (June 21, starting at 7:15pm GMT)
Before the week comes to a close, the euro zone’s top economies will be churning out their flash PMI readings for the current month. Now these are considered leading indicators of economic health, so another round of misses could signal that the ongoing slowdown might persist.
The French flash services PMI is projected to improve from 51.5 to 51.6, possibly marking its third consecutive monthly gain. The flash manufacturing PMI is also expected to advance from 50.6 to 51.0 to reflect a faster pace of expansion.
In Germany, the flash services PMI could dip from 55.4 to 55.3 while the manufacturing PMI probably ticked higher from 44.3 to 44.6 to show a slower pace of contraction. Overall, the euro zone flash manufacturing PMI likely climbed from 47.7 to 48.0 while the services PMI might have moved up from 52.9 to 53.0.
Overall market sentiment
As in the previous weeks, risk sentiment has been a major driving force for both the shared currency and the franc. These currencies had been able to take advantage of risk-off flows and anti-dollar movements, so we might see the same behavior in the days ahead.
Keep in mind, however, that the SNB may have dulled some of the franc’s safe-haven shine when they reiterated their willingness to intervene if the currency becomes overvalued.
Missed last week’s price action? Read the EUR & CHF price review for June 10-14!