Both the euro and Swiss franc take net losses against the majors this week as global risk sentiment swings positive thanks to potential vaccine news and central bank stimulus efforts. Global risk sentiment and counter currency flows that affect both currencies were recapped in the Swiss franc review below.
European Headlines and Economic data
- Eurozone Manufacturing sector contracts, but at slowest rate since April 2019
- German manufacturing PMI rose to an 11-month high of 45.3 in January, from December’s 43.7
- Spanish Manufacturing sector contracts again as employment falls at an accelerated rate
- Slightly quicker improvement in French business conditions as output growth accelerates
- Johnson and Barnier Clash Over Who Sets Rules for Brexit Trade
- ECB’s De Guindos says coronavirus outbreak creates uncertainty
- Unemployment rises in Spain in January
- Industrial producer prices stable in both euro area and EU27
- The Italian consumer price index increased by 0.2% on monthly basis and by 0.6% with respect to January 2019
- IHS Markit Eurozone Composite PMI – economy registers stronger growth at start of 2020
- Spanish business services activity rises at slowest rate since late-2013
- Italian business activity increases at fastest rate for three months
- Slowest rise in French service sector activity for nine months
- German Business activity growth accelerates to five month high
- ECB chief warns of growing risk from coronavirus
- Volume of retail trade down by 1.6% in euro area; Down by 1.3% in EU27
- German Manufacturing in December 2019: new orders down 2.1% (seasonally adjusted) on the previous month
- ECB Economic Bulletin: Risks to global outlook remains elevated, but less skewed to the downside
- Lagarde Says ECB Running Out of Room to Fight Global Threats
- German Construction sector maintains strong growth momentum at start of 2020
- Eurozone productivity rises amid improved trends in Germany and Italy
- Euro zone getting ready to spend more to boost flagging economy
- German Production in December 2019: -3.5% seasonally adjusted on the previous month
- German exports in 2019: +0.8% compared with 2018
- French industrial production weaker than expected
- Italian retail trade up by 0.5% m/m in both value and volume in December 2019
- In 2019, French exports slowed down (+ 3.3% growth after + 3.9% in 2018)
The Swiss Franc
Switzerland Headlines and Economic data
- Procure Swiss Manufacturing PMI: Mixed start to the new year
- Global risk sentiment started off positive this week, likely due to the news of stimulative efforts from the People’s Bank of China to support the likely hit China will take due to the Coronavirus outbreak.
- SNB’s Jordan says coronavirus adding to pressure on Swiss franc
- Risk-on sentiment accelerated on Tuesday to send the franc lower against most of the majors, most likely on news that a vaccine for the Coronavirus is ready for testing and further stimulus efforts from the PBOC.
- Consumer sentiment confirms economy is stabilising – SECO
- We can see a broad spike lower in the Swiss franc during the Wednesday session, possibly related to the news of a breakthrough in the race for a vaccine by a British scientist pushing global risk sentiment further positive.
- Swiss National Bank foreign currency reserves fall in January
- Coronavirus related fears sent risk sentiment back to the negative on the Friday session on news that 41 passengers on a cruise ship quarantined off Yokohama test positive for coronavirus, and concerns the outbreak will do much more economic damage to China than previously anticipated. The franc rallied against the comdolls on the reversal of sentiment, fell against the yen (normal behavior in risk-on environments), and fell against the Loonie and U.S. dollar (both released positive employment updates).