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The Euro
Headlines and Economic data
Monday:
- European Parliament Elections: 5 Biggest Takeaways
- Greek Snap Elections Send Bond Yields to Record Low Levels
Tuesday:
- GfK Consumer Climate slightly lower at 10.1 compared to the previous read of 10.2
- Annual growth rate of broad monetary aggregate M3 stood at 4.7% in April 2019, after 4.6% in March (revised from 4.5%)
- Annual growth rate of adjusted loans to households stood at 3.4% in April, compared with 3.3% in March
- EU’s Moscovici prefers dialogue to sanctions against Italy
- EU’s Juncker says EU will not renegotiate Brexit withdrawal deal
- Italian bond yields jump, bank shares fall as Rome, EU head for budget showdown – this is arguably the catalyst for the broad shift to the downside in euro pairs during the London morning session, and likely the catalyst for broad risk aversion on top of the negative U.S.-China trade developments.
Wednesday:
- In Q4 2018, French GDP in volume terms grew at the same pace as in Q3: +0.3%
- Leo Varadkar warns of ‘growing risk of no-deal Brexit’
- German Unemployment Rises as Weaker Economy Starts to Bite
- ECB worries about high debt, weak banks, property bubble
Thursday:
Friday:
- German retail sales declined unexpectedly by 2.0% month-over-month in April 2019, missing market expectations of a 0.1% rise and after a revised of flat reading in the previous month
- Consumer Price Index CPI in Germany increased to 105.40 Index Points in May from 105.20 Index Points in April of 2019
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S. quickly, hence the risk-off behavior and yen rally. This hit the U.S. dollar pretty hard on the session as it all potentially leads up to Fed rate cuts, and a weak Greenback is likely why we saw the eur rally during the morning U.S. session (with exception against the safe havens).
The Swiss Franc
Headlines and Economic data
Tuesday:
- Switzerland’s GDP rose by 0.6% in the 1st quarter of 2019 versus a revised higher 0.3% in the previous quarter
- Swiss exports fell by 2.3 percent in April 2019 compared with the previous month, imports rose slightly seasonally adjusted (+ 0.8 percent)
- The fall in Swiss franc pairs during the European trading session was possibly linked to the euro’s weakness that fell on the rising Italian debt and budget concerns mentioned in the Euro recap above.
Wednesday:
Friday:
- Swiss retail trade turnover fell in April 2019
- Trump Says U.S. Will Hit Mexico With 5% Tariffs on All Goods – This surprise event from the U.S. sparked global risk aversion sentiment as it comes just a few hours after the U.S. administration submits its already agreed trade deal with Canada and Mexico to Congress for approval. Changing the terms on a whim is likely read by the global community that trade deals with the U.S. aren’t something to be relied upon, and this is arguably further de-motivation for China to lock up a deal with the U.S. quickly, hence the risk-off behavior and Swiss franc rally. This hit the U.S. dollar pretty hard on the session as it all potentially leads up to Fed rate cuts, and a weak Greenback is likely also why we saw the Swiss franc rally starting in the Friday Asia session.