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The Euro was one tough cookie this week as the bulls held their ground despite big shifts in risk sentiment and disappointing economic data from Europe. This Swiss franc was hanging on for a while with the euro until the big positive shift in risk sentiment at the end of the week sent the franc into loser status into the weekend.
The Euro
European Headlines and Economic data
Monday:
- The Eurozone Sentix Investor Confidence continues its fall to -16.8; “There is no positive reaction to the central banks’ aid measures”
- Half euro zone banks wouldn’t survive cash drought: ECB
- British PM Johnson urges EU to respond to his Brexit plan
Tuesday:
- German factories feed unexpected rise in industrial output
- French trade balance remained stable in August, following the deterioration in July
- In August 2019 the monthly growth rate of sales in Italy decreased by 0.6% in both value and volume.
- EU tells British PM Johnson to stop playing ‘stupid’ Brexit blame game
Wednesday:
Thursday:
- German Imports Suggest Trade-Inflicted Slowdown Is Hitting Home
- French industrial production fell in August
- Italian industrial production up 0.3% in August
- Bond buys, tiered deposit rate generated most opposition at ECB policy meeting
The Swiss Franc
Swiss Headlines and Economic data
Monday:
- The Swiss franc started the week on a positive note, likely on sour global risk sentiment after reports of China seeking to narrow its trade deal with the U.S. likely had traders a bit more anxious for the upcoming meetings between China and the U.S. in Washington, D.C. this week.
Tuesday:
- According to surveys by the State Secretariat for Economic Affairs (SECO), at the end of September 2019 the unemployment rate remained at 2.1%
- During the U.S. session, optimism on the U.S.-China trade negotiations story continued to falter, sending traders into safe havens like the franc on the session after reports of the U.S. blacklisting more Chinese companies from trade, and possibly on reports of the White House looking to limit Chinese stocks within government pension funds.
Wednesday:
- More pressure came for the safe havens on rising global risk-on sentiment after signs of a partial trade deal between the U.S. and China appear, a condition China set if President Trump refrains from further tariffs.
Thursday:
- After a short spike higher on reports of no progress between the U.S. and China on trade talks, the franc began it’s really big sell off for the week as traders rushed out of safe havens on a reversal of the earlier reports on the U.S.-China trade negotiation front (White House denies report China’s Liu He plans to leave Washington early; U.S. Weighs Currency Pact With China as Part of Partial Deal) and news of a potential pathway to a Brexit deal after a constructive meeting between Britian and Ireland meeting.
Friday:
- Global risk-on sentiment continued off of more positive updates to U.S.-China trade negotiations (Trump says ‘good things’ are happening at China trade talks), and continued good vibes that a Brexit deal may happen off of Thursday’s news. The bullish excitement for risk assets may also possibly be on the news that the Fed is extending its overnight funding operations through January 2020, a move that supports bank reserves to make sure overnight rates don’t spike higher again to stay within a targeted range.