Even though the Euro ended the day near its all-time highs, the currency pair?s inability to extend its rise suggests that it could be setting up for a much needed correction. Consumer price growth slowed last month from 0.2 percent to 0.1 percent in the Eurozone. This is the tenth straight month that CPI has remained below the central bank?s 2 percent target.
Although this is hardly a market moving number, if we do see stronger producer prices from the US tomorrow and hawkish comments from the Fed later this week, it could help to trigger a nice correction in the EUR/USD. Germany will be releasing the ZEW survey tomorrow. The market is looking for a firmer number, but given recent interest rate hikes, analyst sentiment could easily deteriorate. Switzerland will also be releasing retail sales. In general, growth has been strong and we expect domestic consumption to confirm that as well.