Despite scary economic numbers from the Euro area, the euro and swiss franc come out positive as geopolitical and economic fears push traders into safe havens & low-yielders this week.
The Euro
European Headlines and Economic data
Monday:
- Eurozone growth softens as manufacturing downturn deepens
- IHS Markit France Services PMI: Services employment rises at fastest pace in nine months
- IHS Markit Germany Services PMI: Growth of business activity maintained in July, but outlook gloomiest since 2014
- Sentix investor confidences falls further in August to -13.7
- ECB’s Nowotny Cautions Against New Asset Purchases, Profil Says
- Despite the net negative sentiment data from Europe, the euro gains on the session on risk aversion flows, most likely a reaction to the news of China halting US agricultural imports in retaliation for Trump’s tariff increase, a signal that the damaging trade war between the two countries may get worse.
Tuesday:
Wednesday:
- Scary’ German output figures propel recession fears
- A big pop against the comdolls on the session, mainly on increasing risk-off sentiment on global growth fears that were so strong that central banks have begun starting to cut rates around the world
Thursday:
- ECB Economic Bulletin: “softening global growth dynamics and weak international trade are still weighing on the euro area outlook”
- Italy’s Salvini says government is finished, wants elections
Friday:
- French industrial production drops sharply in June
- German export fall, import rise heightens growth concerns
The Swiss Franc
Swiss Headlines and Economic data
Monday:
- Swiss consumer sentiment remains subdued at −8 points, below the long-term average of -5 points
- Switzerland’s retail trade unexpectedly jumped 0.7% y/y in June 2019, following a downwardly revised 1.1% previous
- The franc pops higher to start the week, likely on the news of China halting US agricultural imports in retaliation for Trump’s tariff increase as mentioned above.
Tuesday:
- The Swiss franc reverse Monday’s gains, likely on the risk sentiment turn around after the PBOC made moves to limit the weakness in the yuan, calming market fears of a currency war.
Wednesday:
- Another round of strength for the franc on the session, again on increasing risk-off sentiment on global growth fears that were so strong that central banks have begun starting to cut rates around the world.
Thursday:
- CHF pulls back further from early week gains, likely on China’s rhetoric to stabilize the yuan and the positive Chinese trade data, once again calming fears of a trade and currency war between the U.S. and China.
Friday:
- Swiss unemployment rate stood at a non-seasonally adjusted 2.1 percent in July 2019
- Risk aversion sentiment rises on the Friday session, likely on the news that the US government won’t do business with Huawei and is not ready to make a trade deal with China to drive traders back into the franc for safety.
