It’s gonna be a busy week for the euro since industry PMI readings are up, followed by the ECB rate decision. Here’s what to expect.
Industry PMI readings (starting Oct. 24, 7:15 am GMT)
It’s the third week of the month, which means another fresh batch of manufacturing and services PMIs from the top economies of the euro zone!
First up, we’ve got the French flash services and manufacturing PMI figures due. The former is expected to improve from 51.1 to 51.6 to reflect a faster pace of industry expansion in October while the latter could dip from 50.1 to 50.0.
Next, Germany’s numbers are lined up, and the manufacturing PMI is expected to advance from 41.7 to 42.0 to signal a slower pace of industry contraction while the services PMI could climb from 51.4 to 52.0.
From there, the aggregate readings for the region will be printed, with both manufacturing and services PMIs projected to show small gains. If so, this could tone down speculations that the ECB is bound to step up its easing efforts anytime soon.
ECB policy statement (Oct. 24, 11:45 am GMT)
On the subject of ECB easing, we’ll actually hear straight from the central bankers themselves later on in the trading session. No actual interest rate changes are expected this time since the ECB already made its move in the September statement.
Also keep in mind that this will be the last ECB meeting for Mario Draghi, as he is due to step down from his post and turn over the position to Christine Lagarde.
With that, most of the market focus could be on the presser that follows the announcement as Draghi would likely be quizzed on what he is foreseeing for future policy. Aside from that, Draghi might also be asked to share his thoughts on the dissent in the ECB, particularly when it came to the latest policy decision.
There are no major reports lined up from the Swiss economy, which could leave the franc more sensitive to changes in risk appetite. In particular, flight to safety could benefit the lower-yielding Swiss currency, even as the threat of SNB intervention looms.
Trade issues could also be worth watching in the European region as the US tariffs on a number of their products already took effect. Note that Europe has threatened to retaliate, and it wouldn’t be surprising if Uncle Sam responds with even more measures.
Missed last week’s price action? Read the EUR & CHF price recap for October 14-18!