European Headlines and Economic data
- Trade War Heats Up as EU Vows to Retaliate on U.S. Auto Tariffs
- Praet Says ECB Could Change Rate Guidance If Outlook Worsens
- German ZEW Investor Confidence Improves To 5-month High In February
- Eurozone current-account surplus shrinks further
- German Producer prices in January 2019: +2.6% on January 2018
- Eurozone growth remains muted amid decline in manufacturing – IHS Markit
- EU president Juncker says he is ‘not optimistic’ that no-deal can be avoided after meeting with Theresa May
- ECB Monetary Policy meeting accounts
- German Ifo Business Confidence At 4-year Low
- ECB Officials See No Need to Rush $800 Billion Bank-Loan Call
Major Market Drivers for the Euro
Euro pair price action was a mixed bag of nuts this week, but the overall performance leaned more positive than negative on better-than-expected data from Europe, counter currency moves and global risk sentiment.
European economic data updates were likely the main driver for the euro’s positive tilt this week with most sentiment survey data coming in better-than-expected including ZEW investor sentiment, manufacturing and services PMI, and consumer confidence. Yes, some reads were still negative or showing contractionary conditions, but the upside surprises gives some relief to euro bulls that have seen weak data and selling pressure increase over the last month or so.
As for uniform euro pair moves off of European catalysts, they were pretty tough to spot this week, but arguably the weak European current account data seems to have pulled in selling pressure on Tuesday, and the only other observable uniform moves looks like Friday when weak German Ifo Business climate data preceded a broad euro pair move lower.
As far as risk sentiment, it was on a positive lean this week as forex traders likely focused on a hopeful trade U.S.-China trade negotiations story, and for a broad rundown of what drove global risk sentiment, check out my review of this week’s risk sentiment drivers and broad market behavior in my Japanese yen weekly review here. This positive lean is likely the reason why we saw the euro’s value against the safe havens JPY and USD rose higher than against the Swiss franc and Loonie while its performance against AUD, NZD had more to do with trade issues in Asia and the British pound had a steller week against all currencies for reasons we have yet to figure out.
The Swiss Franc
Switzerland Headlines and Economic data
- The Swiss trade surplus narrowed to CHF 1.39 billion in January 2019 from a marginally revised CHF 1.76 billion in the previous month.
Major Market Drivers for the Swiss Franc
Swiss franc moving headlines were no where to be seen, and data from Switzerland’s economic calendar was near empty save for a lone update on Switzerland’s trade balance. The report showed a continued surplus, but narrowing lower to CHF 1.39 billion in January from a previous and upwardly revised read of CHF 1.76 billion. Swiss franc pairs arguably rose on the news in tandem, but it appears on the one hour chart above to be a short-lived reaction.
So as usual, it’s likely that global risk sentiment and euro moves were the main drivers for the Swiss franc, as highlighted below when comparing price action against the euro using the U.S. dollar and Japan yen as counter currencies. The Swiss franc nearly moved in lock step with the euro all through the week, so it’s no surprise that the Swiss franc had a net positive week like the euro.