Weak Euro area economic updates brought in the euro bears to take control this week, while the Swiss franc took a hit as it both tracked the euro lower and on a positive shift in global risk sentiment.
The Euro
Overlay of EUR Pairs: 1-Hour Forex Chart
European Headlines and Economic data
Monday:
- German business morale falls as ‘export boomerang’ hits
- Italy government deal looks closer as PD drops Conte veto
Tuesday:
- Weaker exports hit German economy but budget surplus still high
- Weidmann Reprises Dr. No Stance as ECB Stimulus Decision Nears
Wednesday:
- German consumer morale stable despite weaker growth outlook – GfK
- Annual growth rate of broad monetary aggregate M3 increased to 5.2% in July 2019 from 4.5% in June
- Annual growth rate of adjusted loans to households stood at 3.4% in July, compared with 3.3% in June
Thursday:
- German inflation eases again unexpectedly
- German unemployment jump adds to pressure for fiscal stimulus
- EU ministers warn against no-deal Brexit
- French economy shrugs off euro zone slowdown in second quarter
- ECB’s Knot Says Economy Doesn’t Yet Warrant Resumption of QE
Friday:
- German retail sales decline by more than expected in July
- Euro area annual inflation stable at 1.0%
- Euro area unemployment at 7.5%; EU28 at 6.3%
- ECB buying equities for stimulus isn’t option, Nowotny says
- ECB hawks are trying to downplay the chances of a huge stimulus package in September
- Italy’s Di Maio warns snap elections could still happen as he gives opposition PD party an ultimatum
The Swiss Franc
Overlay of CHF Pairs: 1-Hour Forex Chart
Swiss Headlines and Economic data
Monday:
- Trump says US and China to resume trade talks – this was the catalyst for the big market sentiment turn around just before the European session open from the extreme negativity sparked during last Friday’s events. The Swiss franc fell against the majors on the news that “China called the U.S.” to restart trade talks, even after Chinese media debunked the idea that China called the U.S. over the weekend, and managed to hold most of its gains off of this event through the whole week.
Thursday:
- SNB’s Maechler Says Franc Level Means Expansionary Policy Needed
- Broad mover lower in the franc against the major currencies during the morning London session, possibly on the news that China won’t retaliate to new U.S. tariffs and their rhetoric on resolving the trade dispute with a ‘calm attitude.’ It showed China isn’t looking to escalate the trade war further which calmed down traders into lightening up on safe-haven bets and getting back to risk assets.
Friday:
- KOF economic barometer comes inline with the previous read of 97.0
