More economic arguments for ECB stimulus continues to put pressure on the euro, while the Swiss franc benefited from big time late week geopolitical news.
European Headlines and Economic data
- Consumer Price Index CPI in Spain decreased to 104.20 Index Points in July from 104.82 Index Points in June of 2019
- German consumer morale drops as recession fears spread, GfK says
- French Q2 growth slows unexpectedly to 0.2%
- German retail sales jump, labour market shows resilience
- Euro area annual inflation is expected to be 1.1% in July 2019, down from 1.3% in June
- Preliminary flash estimate for the second quarter of 2019 shows GDP up by 0.2% in both euro area and EU28
- Euro area unemployment at 7.5%; EU28 at 6.3%
- A relatively busy day of economic updates from Europe, which were arguably not strong enough to deter the need for additional stimulus from the ECB, especially with the continued inflation deceleration. This was likely the catalyst for the broad move lower in the euro during the European trading session, as well as USD strength after the not-so-dovish FOMC monetary policy statement.
- IHS Markit Eurozone Manufacturing PMI: manufacturing sector contracts at fastest rate since end of 2012
- Trump’s new tariffs may set stage for more Fed rate cuts
- Entire German govt bond yield curve turns negative for first time ever
- Industrial producer prices down by 0.6% in both euro area and EU28
- Volume of retail trade up by 1.1% in euro area; Up by 1.2% in EU28
The Swiss Franc
Swiss Headlines and Economic data
- Trump announces new tariffs on $300 billion in Chinese goods -this event set global financial markets into fear and uncertainty mode as traders were caught off guard given the earlier rhetoric in the week was that U.S.-China negotiations were ‘constructive.’ The Swiss franc drew in risk-off flows as it fell back into its usual “safe haven” role among the major currencies, rallying into the weekend and falling only to the Japanese yen.