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The euro and franc spent the week mixed ahead of the highly anticipated ECB monetary policy meeting, but euro bulls took control after the event (likely on profit taking and a stimulus package that wasn’t as strong as expected). Meanwhile, the franc continued to be under pressure into the weekend, likely on the positive risk environment sparked by improving geopolitically driven themes.
The Euro

European Headlines and Economic data
Monday:
- German exports rise unexpectedly in July
- The Sentix economic indices improved slightly in September to -11.1 vs. -13.7 in August
Tuesday:
- French industrial output up 0.3% in July, undershooting forecasts
- Italian Industrial production down 0.7% in July
Wednesday:
- Broad fall in the euro against the majors on the session, possibly on rising risk sentiment after China waives tariffs on some US goods for first time since the trade war began, but more likely on positioning ahead of what is expected to be a very dovish ECB monetary policy statement.
Thursday:
- Industrial production down by 0.4% in euro area; Down by 0.1% in EU28
-
European Central Bank cuts its deposit rate, launches new bond-buying program
- The market was looking for a 20bps depo rate cut and QE to the tune of EUR 30 billion per month, so the actual package came in weaker at 10bps cut and EUR 20 billion per month, which is likely why we saw a strong relief rally in the euro despite very dovish rhetoric on the economic outlook from Mario Draghi comments at ECB press conference.
Friday:
- Euro area international trade in goods surplus €24.8 bn; €0.1 bn deficit for EU28
- Annual growth in labour costs at 2.7% in euro area; At 3.1% in EU28
- ECB hawks rally against Draghi’s farewell stimulus
- Varadkar says gap between EU and UK on deal ‘very wide’
- The broad strength in the euro may have stemmed not only from the ECB event relief rally, but also on talk that Boris Johnson is edging closer towards agreeing a new Brexit deal, stemming no-deal Brexit anxiety.
The Swiss Franc

Swiss Headlines and Economic data
Monday:
Tuesday:
- Global risk sentiment began to shift towards positive for the week, starting with talk that China ready to sweeten deal by buying American goods, pushing traders away from “safe haven” assets like the Swiss franc during the U.S. trading session.
Thursday:
- Swiss National Bank stays mum on policy after ECB eases further
- Producer and Import Price Index fell by 0.2% in August 2019
- The Swiss franc trades in lockstep with the euro during the ECB events, but generally saw pressure for the rest of the session as global risk sentiment continues to move towards positive on both the improving U.S.-China trade situation (China exempts U.S. agricultural products from tariffs after reports of potential interim trade deal) and the ECB’s stimulus package.
Friday:
- Mixed ending for the Swiss franc on Friday likely due to counter currency flows, strengthening against the yen, Kiwi and Loonie while falling to the euro (continued relief rally after the ECB meeting on Thursday) and the British pound (support on potential that Boris Johnson is edging closer towards agreeing a new Brexit deal).