Talk about a slow day! After EUR/USD’s major moves following the ECB rate decision, the pair found itself simply chillin’ like a villain’ last Friday. The pair didn’t exhibit much movement as it traded in a relatively tight 77-pip range. It closed the day at 1.3363, just 41 pips lower from its opening price.
No major data on the economic cupboard today as only December’s French Industrial Production report is scheduled to come out. It’ll be released at 7:45 am GMT and analysts anticipate that production decreased 0.3% for the month. In November, industrial production rose 0.5%. Since industrial production is considered as a leading indicator of economic growth, declining production is usually interpreted by traders as bearish for the domestic currency.
Looking forward to the week ahead, the only red flag is the release of the Q4 2012 Flash GDP. It’s going to be published on Thursday, at 10:00 am GMT and is projected to show that the euro zone contracted 0.4% in Q4 2012, which means that the region remained in recession. Let’s see if the negative expectations will drag the euro lower this week.
Phew! Thanks to mixed sentiment from the EU leaders, the euro was able to snap its consecutive losses against its counterparts. EUR/USD ticked 27 pips higher while EUR/GBP enjoyed a nice 91-pip rally. So what spurred on the euro bulls?
No major data was released from the euro region yesterday, but the euro zone finance ministers’ meeting in Brussels revealed that the leaders have mixed sentiment over the euro’s recent strength. Fortunately for the common currency, traders paid closer attention to Bundesbank President Jens Weidmann, who doesn’t believe that the euro is extremely overvalued.
The economic cupboard is empty again today, save for ECB head Mario Draghi’s speech in Madrid at 4:30 pm GMT. Will he repeat his sentiments on the euro’s strength or will he adjust his new speech to give nods to Germany’s lack of concern on the issue? Stay glued to the tube to find out!
Draghi giveth and Draghi taketh away! After crippling the euro with his remarks in last weeks rate decision, the ECB head breathed life back into the shared currency with some new comments. As a result, the euro staged a 55-pip rally to end at 1.3442.
Leave it to the central bank president to send the euro back up the charts! In his speech yesterday, Draghi spoke up to express that he has been displeased with how euro zone officials have been extremely vocal with their opinions on the euro’s current trading levels. He feels that all this talk of a currency war is greatly exaggerated and that everyone should just take a chill pill. More importantly, he added that the euro is trading near its long-term average, which basically suggests that he ain’t too worried about its recent appreciation.
On another note, he also made it a point to recognize recent improvements in Spain, saying that it has made a lot of progress since November of 2011.
Looking ahead, we have industrial production data coming out at 10:00 am GMT. Expect it to erase the November’s 0.3% slide with a 0.3% uptick in December.
It was a ho hum day for the euro yesterday as traders wait for the bigger economic reports on tap later in the week. EUR/USD only rose by 7 pips while EUR/JPY capped the day with a doji. What’s in store for the euro today?
A lot of GDP reports, that’s what. Starting at 7:30 am GMT all the way to 11:00 am GMT we’ll see quarterly GDP reports from France, Germany, Italy, and the whole euro region. Keep close watch on Germany’s figures since investors might be more concerned about how the region’s largest economy is faring.
At 10:00 am GMT we’ll also see the ECB monthly bulletin, which could provide details on the ECB’s outlook on the economy and the euro. Word on the hood is that the central bank is getting worried about the euro’s appreciation. If the ECB hints at any plans on weakening its currency, then we might see the euro pare some of its intraweek gains against its counterparts.
Ooh, that’s gotta hurt! EUR/USD crashed below the 1.3400 handle during the London session while EUR/JPY tumbled to the 124.00 mark after the euro zone released its GDP reports. Let’s take a look at the numbers to see the damage.
Euro zone GDP figures came in weaker than expected for the last quarter of 2012 as the region’s largest economies weren’t spared from the bloodbath. Germany printed a 0.6% contraction, France posted a 0.3% drop in growth, and Italy showed a -0.9% reading. These were enough to plunge the euro zone deeper in a recession as it chalked up a 0.6% decline in GDP for the period, its third consecutive quarterly contraction.
It didn’t help that an ECB official was quoted saying that negative interest rates could be an option if the central bank desperately needs to boost growth. Even worse, an S&P official later on warned that Spain, Portugal, Italy, and France could suffer debt downgrades this year. Now I understand why they say bad things come in threes!
No other major reports are due from the euro zone today, which suggests that the bleak GDP reports could keep weighing the euro down. Be mindful of any changes in market sentiment though!
With no major data coming out, the euro traded to the beat of other currencies last Friday. EUR/USD stayed within range and closed at 1.3354, up 17 pips from its opening price. Meanwhile, after hitting an intraday low at 122.90, EUR/JPY shot up late in the day to finish at 124.75, marking a 60-pip gain on the day.
Will we see more action from the euro today? Tune in when the action starts at 9:30 am GMT, as the euro zone current account figures will be made available. Word on the street is that a surplus of 15.3 billion EUR was reached last month, which would be a nice follow up to the 14.8 billion EUR figure we saw last month.
The bigger market mover though could be when ECB President Mario Draghi speaks before the Economic and Monetary Committee at 2:30 pm GMT. Given the recent string of bad GDP figures from euro zone participants, it’ll be interesting to see what Super Mario’s got to say on this developing issue. In any case, watch out, as you never know what he might say!
Uh oh, is the euro in trouble? EUR/USD has been trading cautiously at the start of the week as the pair is treading carefully around the 1.3350 area. EUR/JPY also seems to be undecided where to go as it is tiptoeing around the 125.00 handle.
The lack of economic data from the euro zone and the absence of U.S. traders, who were off enjoying their President’s Day holiday, kept EUR/USD in a tight range yesterday. On top of that, traders seem to be hesitant to take any huge euro positions as the European Commission is set to unveil their growth forecasts for the euro zone later on this week.
Germany is also set to print its ZEW economic sentiment figure for February at 10:00 am GMT today. Recall that euro zone’s largest economy just reported a sharper than expected economic contraction for Q4 2012 last week and this could weigh on overall economic sentiment in the country. Analysts are expecting an improvement from 31.5 to 35.3 but a big downside surprise could trigger a strong breakdown for the euro pairs. Stay on your toes!
If there’s anything we learned from yesterday’s trading, it’s that you can never count the euro out! After two days of standing still, the markets breathed life back into the shared currency, pushing it 37 pips up against the dollar and 45 pips higher against the pound.
Thanks to a couple of better-than-expected ZEW economic sentiment reports, demand for the euro was as healthy as a horse!
Germany reported much improved investor confidence to record its highest level in almost 3 years. Its index rose from 31.5 to 48.2 in February, beating the consensus forecast which called for a reading of 35.3.
Meanwhile, the euro zone-wide version of the index surged from 31.2 to 42.4, surpassing forecasts for a reading of 35.5. It’s no surprise the markets went nuts for the euro after seeing these two reports -they’re basically confirming the region’s economic recovery!
Today, we’ve got more German reports coming our way. At 7:00 am GMT, German PPI data will be available. Look for it to show an increase of 0.4%, reversing the previous month’s 0.3% losses. At the same time, the German CPI will be published. It’s slated to show a 0.5% decline in prices, the same as what we saw in December.
Geronimooo! The euro plunged on the charts faster than a Britney Spears’ hit. EUR/USD closed below the 1.3300 handle yesterday, closing with a 103-pip loss. Meanwhile, EUR/JPY was down at 124.28 from its open price of 125.29 by the end of the New York session.
For the most part, the drop in EUR/USD was because of the surge in demand for the dollar following the less-dovish-than-expected FOMC meeting minutes. The report from the Fed showed that the central bank could actually put an end to QE before it’s planned expiration.
It also didn’t help the euro that Spanish officials gave markets a heads up that they might not hit the debt reduction target that the Eurogroup set for them at 6.3%. Yikes!
Today will be a big day for the euro with a handful of PMI reports on tap. I’m pretty sure that the figures will either fuel the euro sell off or allow it for a comeback. So make sure you do’t miss them!
At 8:00 am GMT, France will release its manufacturing (43.9) and services (44.5) PMIs. Then at 8:30, it will be Germany’s turn with its manufacturing PMI seen at 50.4 and services PMI eyed at 55.5.
Finally, at 9:00 am GMT, the euro zone-wide figures will be released with the manufacturing reading estimated at 48.4 and that for services seen at 49.2.
Best of luck, cool cats!
The euro crashed and burned in yesterday’s trading as ugly PMI figures shot the shared currency down. After an entire day of trading, EUR/USD found itself 113 pips lower at 1.3171.
Looks like the markets got a bitter taste of reality in the euro zone - recent PMI numbers reminded everyone that the region ain’t in the clear yet.
The PMI released yesterday suggest that things are taking a turn for the worse in the euro zone, with the economic gap between Germany and France widening further and further. We saw continued contraction in the French manufacturing and services industries, while Germany continued to power through and register growth in the same sectors.
As a whole, the region’s manufacturing PMI (47.8 vs 48.4) and services PMI (47.3 vs 49.2) remained in sub-50 territory, indicating contraction once again. All in all, this ain’t good news for the euro zone, whose member nations are already facing threats of a debt rating downgrade.
It’ll be interesting to see if these ugly numbers will play into the release of the European Commission’s economic forecasts (due at 10:00 am GMT) today. If we see downward revisions to growth figures, it could very well result in further losses for the euro.
On another note, German IFO business climate data will also be available today at 9:00 am GMT. Look for Germany to continue to post positive results as the index is expected to tick up from 104.2 to 104.9. Needless to say, if Germany fails to meet market expectations, it could add fuel to the euro selloff.
Thanks to some good economic data, the euro was able to avoid another day in the red. EUR/USD stayed in consolidation and eventually ended the day at 1.3179, up 9 pips from its opening price.
The German IFO business climate report printed a score of 107.4, which was much better than the anticipated 104.9 prediction. Not only did this mark the fourth consecutive month that the index printed a higher figure, but it is now also at its highest level since April last year. Could this be a sign that the Germany economy is really picking up?
Over the next couple of days, the biggest even that will be on euro traders’ minds will be the upcoming Italian elections. Word on the street is that challenger Bersani is the favorite to win, but rumors are that Berlusconi still has an outside of re-establishing himself as the Italian PM. If it appears that we could be in for more political tussle, we may just see the euro takes a few more hits to end February.
Oh, the pain! The euro was subjected to an intense beating in yesterday’s trading session as the latest results of the Italian elections showed that there is a high possibility that we’ll see a hung parliament. EUR/USD is now sitting at 1.3079, 150 pips lower from its week open price.
According to polls, the center-left coalition led by Pier Luigi Bersani is leading in both the lower and upper houses of parliament. However, former Silvio Berlusconi’s rightist coalition is following closely with a 29% vote. In the Senate, it was reported that Bersani’s party took 37% while Berlusconi’s camp got around 31%. There is a lot of political risk surrounding Italy’s next leadership as the race to the top is very close.
Euro zone’s economic cupboard is empty today but given yesterday’s developments, we may still see some strong moves. Once London opens, traders could start readjusting their positions to the new developments in Italy’s political arena.
Make that back-to-back! Once again, risk sentiment soured on the euro, as EUR/USD closed 67 pips lower at 1.3054, while EUR/JPY ended at 120.04, down 147 pips from its opening price.
It appears that there is still leftover sentiment from the Italian elections that is weighing heavily on the euro. This has helped lead to a spike in Italian yields, which have risen to their highest levels since late last year. If Berlusconi and Bersani fail to form a coalition government, this could send the euro into a tailspin, which will most likely lead to EUR/USD swan diving below 1.3000.
For today, we’ve got a couple of potential market mover that you should pay attention to.
First up is the GFK German consumer climate index due at 7:00 am GMT. The index is projected to print at 5.9, which would be a slight improvement from the 5.8 reading we saw last month. A surprise drop in the index could trigger some more euro selling.
Also, keep an eye out for the 10-year Italian bond auctions. In past months, yields had consistently been lower, but we’re bound to see much higher yields at today’s auction. This could spark some volatility in the markets, so watch out!
Easy does it! The euro finished the day higher against most of its counterparts yesterday, rising at a steady pace. EUR/USD was up at 1.3139 by the New York session close from its opening price of 1.3055. While EUR/JPY was 113 pips higher at 121.17.
Nothing and no one was going to ruin the euro’s day! I know it didn’t score triple-digit gains but it’s noteworthy that it still performed well despite remarks from ECB President Draghi reiterating that the ECB is still far from worrying about an exit strategy and political uncertainty still clouding Italy.
It would seem that the successful Italian bond auctions was enough to boost the shared currency. Although yields on 10 year bonds rose to 4.83% from 4.17% at the previous auction, there was a lot of demand from investors. The bid-to-cover ratio improved from 1.3 to 1.7 in yesterday’s auction.
However, some analysts warn not to get too excited about buying the euro. For one, Italy is not yet out of the woods. In fact, it would seem that Italians would need to head to the polls again soon with candidates not expressing support for Bersani’s government. Yikes!
On top of that, economic reports from the euro zone may just once again remind us that the region is at risk of recession. Due later at 8:55 pm GMT, the German unemployment change report for January is seen to print a 5,000 loss. Then at 10:00 pm GMT, the region-wide CPI report for the same month is eyed at 2.0% while the core CPI is seen at 1.5%.
Worse-than-expected reports as well as more talks about political uncertainty for Italy could send the euro lower, so watch out!
Now you see it, now you don’t! Just when we thought that the euro is gaining ground in the markets, it pared most of its gains against the dollar and the pound yesterday. It stabilized against the yen though, and even inched a few pips higher against the franc.
With the euro zone’s economic reports coming in worse-than-expected, can you really blame the euro bears from attacking? Data from Germany yesterday showed that while the number of unemployed workers trickled lower, the unemployment rate also held steady at 6.9%. Meanwhile, France’s consumer spending dropped by 0.8% in January instead of slipping by 0.1% as markets had expected.
Of course, it also didn’t help that Italy still doesn’t have a solid government. Until Bersani can form a coalition government that would eliminate the need for another elections, we might see the issue continue to weigh on the common currency.
Let’s see if the euro can take back its gains today when a couple of second tier reports are released. At 8:00 am GMT we’ll be seing Germany’s retail sales report, followed by the Spanish and Italian manufacturing PMIs. Then at 10:00 am GMT we’ll see Italy’s monthly and quarterly unemployment numbers. Good luck and good luck on trading the first day of the month, folks!
The euro sure did paint the town red in Friday’s trading, literally! The shared currency finished lower against the dollar as risk aversion dominated market sentiment. EUR/USD was down 37 pips at 1.3018 by the New York session close.
Bad news hit the euro from all sides. For one, the ECB reported that European banks only paid 12.5 billion EUR in LTRO payments which is waaay below the amount it received the week prior at 67 billion EUR. Consequently, this raised concerns about European banks still being in need of liquidity.
Italy’s political scene was also a source of worry as Bersani announced that forming a grand coalition is not an option. Yikes!
Of course, there were also a couple of reports from the euro zone that disappointed expectations. The CPI flash estimate for February only came in at 1.8% while the consensus was for a 2% uptick. The unemployment rate also edged higher to 11.9% in January, up from its previous reading of 11.8%.
It would seem that these figures weren’t able to offset the positive reading of the German retail sales for January which came in at 3.1% versus the 1.1% forecast.
This will be another action-packed week for the euro with the ECB rate statement scheduled on Thursday. But until then, you can look to the rest of the reports which are due from the euro zone.
For today, the Spanish unemployment change is on tap at 8:00 am GMT. The report is anticipated to come in at 77,500 for February. Also be sure to keep an ear out for updates regarding the Eurogroup meetings today. Remarks from policymakers regarding growth and Italy’s political squabbles could affect the euro, so be updated!
Someone call an ambulance because we got a dead pulse over here! Due to the lack of tier 1 economic data, EUR/USD moved like it was out of life. The pair ranged heavily as it found support at 1.2982 and resistance at 1.3032.
There were a couple medium-tier data that were released though. The first one was the Spanish Unemployment Change. It came in significantly better than expected as it showed that the number of jobless people increased by 59,400. The forecast was for an increase of 77,500.
Quickly after that, the Sentix Investor Confidence was published. Unfortunately, it published a worse-than-expected, printing -10.6 instead of -4.5.
The last piece of data was euro zone’s Producer Price Index. It showed a 0.6% increase, slightly higher than the 0.5% increase the market had initially predicted.
Today, we’ll be treated to a bunch of PMIs as well as euro zone’s retail sales report.
Starting 8:15 pm GMT, the Services PMIs of the major economies of the region will be released. Keep an eye on these as better-than-expected results could cause EUR/USD to break out of its range and move higher.
At 9:00 am GMT, euro zone’s retail sales report will come out. It’s projected to show a 0.3% increase, opposite the 0.9% fall we saw last month. Let’s see if the positive forecast will be able to boost the euro.
Chop, chop, chop! EUR/USD spiked this way and that, but the pair managed to hold on to the 1.3050 minor psychological level during yesterday’s trading. EUR/JPY also had a choppy day as it moved sideways along 121.50.
The lack of major economic data from the euro zone was probably the reason why euro pairs barely budged from their current levels. Only the Spanish and Italian services PMI were released, along with the euro zone retail sales report which came in better than expected at 1.2%.
For today, only the revised GDP report is due from the euro zone and this isn’t likely to have a huge impact on euro pairs. No revisions are expected for the 0.6% contraction recorded in Q4 2012, which would confirm that the euro zone has entered its third quarter in recession. Keep an eye out for that release around 10:00 am GMT and stay on your toes for any updates that could affect overall market sentiment as well!
EUR/USD weakened strongly yesterday due to the speculation that the ECB would set the stage for further monetary easing in its next policy statement. EUR/USD started the day at 1.3041 but closed the U.S. trading session at 1.2995.
According to analysts, the bleak economic outlook would probably force the ECB to at least tell the market that it is open to easing. Data recently has been bleak, with euro zone’s GDP contracting by 0.6% in Q4. Meanwhile, leading indicators like the manufacturing and services PMIs show contraction in Q1.
We’ll know what the ECB’s plans are later today, at 1:45 pm GMT. The forecast is that it’ll maintain the minimum bid rate at 0.75% and hold off on implementing stimulus measures. But as I just mentioned, be aware of the possibility of a dovish statement due to the euro zone’s weak fundamentals. If that happens, we could see EUR/USD crash down again.
They don’t call the ECB Governor “Super Mario” for nothing! Thanks to his surprisingly upbeat tone yesterday, Mario Draghi inspired a 113-pip rally in EUR/USD; 87-pip rise in EUR/GBP, and a whopping 209-pip boost on EUR/JPY. What a coup!
Okay maybe the better-than-expected Spanish bond auctions also had something to do with the euro rally. Yesterday Spain got enough demand to meet its 5 billion EUR target, which it sold at lower yields (4.92%) than the previous auction (5.20%).
But it was Super Mario Draghi who brought home the bacon for the euro. Though the ECB kept its rates steady at 0.75% AND cut its growth and inflation forecasts for 2013, the markets paid attention to what Draghi had to say.
In his speech, he hinted that the region’s economies would have to deteriorate a lot more before we can expect a rate cut. Not only that, but Draghi also suggested that the weakness that we’ve been seeing recently are just overhangs from a weak Q4 2012 and that we’ll see a recovery around later this year.
Wait a minute. Is he saying that things will get ugly before they get beautiful? Looks like someone’s been listening to Chris Brown’s “Don’t Judge Me!” In any case, the euro bulls bought his optimism and boosted the euro up the charts.
Will the euro continue to see gains today? Only the German industrial production is up at 12:00 pm GMT, so you might want to pay more attention to the big NFP report coming up in the U.S.!