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The Euro
European Headlines and Economic data
Monday:
- EU prepares multi-billion aid plan to shield Ireland from no-deal Brexit
- Bundesbank Sees German Unemployment Rising on Economic Downturn
Tuesday:
- In July 2019, the DG ECFIN flash estimate of the consumer confidence indicator improve to -6.6 points in the euro area and -5.9 points in the EU
- EU tells incoming British PM Johnson it won’t change Brexit terms
- Euro pairs began a broad move lower during the Tuesday session with a direct major catalyst. It was likely pre-preemptive positioning ahead of the impending ECB monetary policy meeting, and possibly on U.S. dollar strength which was sparked by news of the likelihood that the U.S. and China will meet next week, bringing positive sentiment to the global trade war story.
Wednesday:
- IHS Markit Flash Eurozone PMI; economic growth falters as manufacturing downturn deepens
- Annual growth rate of broad monetary aggregate M3 decreased to 4.5% in June 2019 from 4.8% in May
- EU lawmakers see higher risk of no-deal Brexit with PM Johnson
- Euro zone lending figures mask growing divide
Thursday:
- EU will not renegotiate Brexit deal, Juncker tells Johnson
- The Ifo Business Climate Index fell from 97.5 (adjusted for seasonal adjustment) to 95.7 points in July
- ECB signals a rate cut, more monetary easing ahead – Draghi was less dovish than expected, not taking any action as implied at their last meeting to stimulate the economy and saying that the risk of recession was still low. This is likely the catalyst for the big euro bounce during the morning U.S. trading session.
- ECB pledges more easing and ponders inflation goal review
The Swiss Franc
There were no major headlines or economic updates from Switzerland to influence the Swiss franc this week. The franc did manage to stay positive against most of the major through Thursday, suggesting it was more influenced by the negative geopolitical environment (Boris Johnson wins U.K. PM; no-deal Brexit odds rise) and broad weakness in global economic updates (Eurozone PMI shows manufacturing downturn deepens).
Thursday was a different story, though, as the Swiss franc was kicked lower with the euro after the ECB’s monetary policy statement, which likely prompted investors to bet the SNB will go more negative on interest rates after ECB.