EUR USD Weekly Outlook

[Samirofi]

EUR/USD Forecast Jan. 11-15

EUR/USD had a turbulent start to 2016, driven by sentiment more than anything else. What’s next? The ECB’s meeting minutes is the big event awaiting us.


It was a risk on / risk off week, with the euro enjoying the risk off sentiment, or gloomy mood, to rise against most currencies. It’s safe haven role was seen almost all the time, alongside the crash in Chinese and other stocks, the slide in oil and the various geopolitical scares. The one exception to the rule was when Inflation in the euro-zone fell short of expectations, risking more ECB action that could weaken the euro. In the US, the NFP report was excellent, but with the rate hike already behind us and the gloomy mood having control, it did little to cheer the dollar against the safe haven euro.

1. Sentix Investor Confidence: Monday, 9:30. This survey of investors fell short of expectations in December with a slide to 15.7 points. Will the recent gloomy market mood push it even further down? A score of only 11.5 is on the cards now.
2. French CPI: Wednesday, 7:45. Prices in France dropped by 0.2% in November. After the disappointing figures from Germany we can expect more pressure from the second largest economy. A small rise of 0.1% is predicted.
3. Industrial Production: Wednesday, 10:00. Industrial output in the euro-zone advanced by 0.6% in October. Despite the lagging release, this figure is watched. A drop of 0.2% is expected.
4. German WPI: Thursday, 7:00. The Wholesale Price Index is yet another measure of inflation. After a drop of 0.2% in November, another slide is likely.
5. Eurogroup meetings: Thursday. Finance ministers of the euro-zone convene for the first time in 2016 amid an expectation for countries to miss their deficit targets, and it’s not only Greece. Germany is spending on refugee accommodation, France on security and other countries such as Italy seem impatient with austerity. Will 2016 mark the end of austerity?
6. ECB Meeting Minutes: Thursday, 9:00. These are the minutes from the December meeting in which Draghi disappointed. The ECB did cut the deposit rate by 10bp and announced an extension of the QE program as well as reinvesting proceeds, but this didn’t meet investors’ expectations, which were basically fueled by Draghi himself. Some reports claimed that he was not able to do more due to internal opposition. We’ll now learn how significant it was and in addition, see if inflation forecasts meet reality.
7. Trade Balance: Friday, 10:00. The euro-zone enjoys a trade surplus, most prominently thanks to German exports. In the month of October, this surplus slipped to 19.9 billion, and it could be similar now.

* All times are GMT

[Samirofi]

EUR/USD Forecast Jan. 25-29

EUR/USD traded on safe haven flows and was pushed down on Draghi, albeit has not found a clear direction. Will it move out of range now? Fresh inflation figures and yet another appearance form the ECB President take center stage in the last week of January. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.


Draghi went dovish, noting downside risks from China, oil prices and more. Most importantly, he made it clear the ECB is ready to act to reach its inflation target by announcing more measures in March. This pushed EUR/USD lower within the range. Apart from that, PMIs generally missed expectations while German business confidence is slightly lower, but better than expected according to ZEW. Another German survey starts the week. In the US, data was mixed, but there is a growing notion that also the Fed will lean to the dovish side.

1. German Ifo Business Climate:Monday, 9:00. Germany’s No. 1 Think Tank showed stable business confidence in December, with a score of 108.7 points. A small slide to 108.5 is expected in this key survey in the continent’s largest economy.
2. Belgian NBB Business Climate: Monday, 14:00. Despite coming from a small country, this wide survey his highly regarded. After a significant improvement to -1.4 points, a slide back down to -1.9 points is predicted. The negative number reflects pessimism.
3. Draghi talks: Monday, 18:00. The president of the ECB will have another opportunity to influence the euro, now with more market reactions already in place. His speech in Frankfurt could emphasize the level of worry about inflation and also show his determination to act.
4. German GfK Consumer Climate: Wednesday, 7:00. This consumer survey has already seen better days in mid 2015, when it began sliding. The 2200 strong survey is likely to slip from 9.4 to 9.3 points.
5. German Import Prices: Thursday, 7:00. Prices of imports, notably energy, are on a losing streak. After a drop of 0.2% in November, a bigger fall of 1% is expected for December.
6. Spanish Unemployment Rate: Thursday, 8:00. Spain is the continent’s fourth largest economy and continues suffering a devastating unemployment rate, despite some improvement. For Q4, the unemployment rate is predicted to tick up from 21.2% to 21.3%.
7. German CPI:Thursday, states release data during the European morning with the all-German figure at 13:00. The miss on German inflation opened the door for a fall in euro-zone prices and for the ECB’s warnings. The preliminary numbers for January are expected to show a monthly drop of 0.8%, much more than 0.1% seen in December.
8. French GDP: Friday, 6:30. The continent’s second largest economy enjoyed a relatively stronger growth rate of 0.3% in Q3, and a slowdown is expected now, to 0.2%. While a weaker euro and the ECB’s easing help, growth is not spectacular, to say the least.
9. German retail sales: Friday, 7:00. In the past few months, this indicator of consumer spending missed expectations. After a rise of 0.2 in November, an accelerated pace of 0.3% is predicted.
10. French CPI: Friday, 7:45. Prices in France advanced by 0.2% in December, more than expected, but this didn’t change the overall picture for euro-zone inflation. Consumer spending will also be release, and here, a rebound with +0.8% is expected for December after a slide of 1.1% in November.
11. Spanish CPI: Friday, 8:00.Deflation has been quite visible in Spain during 2015, but this time, in the preliminary figure for January 2016, a positive 0.1% is expected after no change in December.
12. Spanish GDP: Thursday, 8:00. Partly in thanks to the depressed prices, real growth has been super strong in recent quarters with +0.8% in Q3. The same figure is on the cards for Q4 2015.
13. Monetary data: Friday, 9:00. The ECb’s actions have resulted in an accelerated pace of money in circulation, with 5.1% y/y seen in November, a pace of 5.2% is on the cards for December. Private loans are also predicted to rise to a pace of 1.5% from 1.4% beforehand. They were in negative ground not that long ago.
14. CPI: Friday, 10:00. Draghi warned that the inflation outlook has deteriorated and now, after the some data from other countries, we will receive the flash euro-zone data for January. Headline inflation is expected to rise from 0.2% to 0.4%, partly due to the removal of the base effects – the big fall in oil prices in early 2015. Core inflation is not expected to move from the annual pace of 0.9%.

* All times are GMT

[Samirofi]

EUR/USD Forecast Feb 1-5

Euro-zone inflation came out marginally above expectations, but on the other hand, German business confidence disappointed. Draghi repeated the dovish stance, but this was somewhat forgotten. In the US, the Fed erred to the side of caution, lowering the chances of a hike in March, as data was underwhelming to say the least.

1. Mario Draghi talks: Monday, 16:00 and Thursday, 8:00. The president of the ECB knocked down the euro in the recent rate decision but the pair never really went very far. Given the internal struggle within the Frankfurt based institution and the recent inflation data, it will be interesting to hear what he has to say now about the March meeting. He may give a shot of hitting the euro when it’s down. However, just repeating the dovish stance won’t cut it.
2. Manufacturing PMIs: Monday: Markit publishes the data for Spain at 8:15, Italy at 8:45, final French data at 8:50, final German figures at 8:55 and the final euro-zone figure at 9:00. The fourth largest economy had OK growth in the manufacturing sector, with 53 points. 52.7 is expected now. Italy, the third largest one, enjoyed stronger growth at 55.6 points and is now expected to see 54.9.. According to the preliminary release, France, the second largest economy, was perfectly balanced between growth and contraction at 50 points. Germany had 52.1 and the whole euro-zone 52.3 points. The preliminary figures are expected to be confirmed now.
3. Spanish Unemployment Change: Tuesday, 8:00. This monthly release is watched due to Spain’s perilous job market. In December, 55.8K people came out of unemployment. A rise of 71.2K is on the cards.
4. German Unemployment Change: Tuesday, 8:55. The continent’s largest economy enjoys persistent drops in the number of unemployed, standing at 14K in November. We will now get the full year data. Another drop of 8K is expected.
5. Unemployment Rate: Tuesday, 10:00. The unemployment rate is falling in the euro-zone but still remains high. In November, it surprised with a drop to 10.5%. The same level is expected now.
6. PPI: Tuesday, 10:00. Producer prices feed into consumer prices and impact the ECB’s decisions. A drop of 0.2% was seen in November. -0.4% is predicted now.
7. Services PMI: Wednesday: Markit publishes the data for Spain at 8:15, Italy at 8:45, final French data at 8:50, final German figures at 8:55 and the final euro-zone figure at 9:00. Spain and Italy both enjoyed nice growth in the services sectors, 55.1 and 55.3 respectively, back in December. Drops to 54.6 and 54.2 are expected now. According to the initial figures for January, France remained behind with weak growth of 50.6, Germany saw 55.4 and the whole euro-zone stood on 53.6. Markit is expected to confirm these reads now.
8. EU Economic Forecasts:Wednesday, 10:00. Every 6 months, the European Commission publishes economic forecasts, including not only growth but also other numbers. Will they downgrade the data because of China?
9. Retail Sales: Wednesday, 10:00. While this indicator is published after German and French figures, it still moves markets. In November, the volume of sales dropped by 0.3%. In December, a rise of 0.4% is expected.
10. ECB Economic Bulletin:Thursday, 9:00. In the recent rate decision, Draghi told us about further downside risks. We ill now learn a bit more about the ECB’s work and estimations about the economy that were sitting in front of the members’ eyes.
11. Retail PMI: Thursday, 9:10. This purchasing managers’ index for the retail sector has suffered a slide to contraction territory, with a fall below 50 points back in November. Also December saw a poor score of 49 points.
12. German Factory Orders: Friday, 7:00. The volume of orders rose in both October and November, beating expectations on both occasions. Will the positive trend continue? A slide could be seen now, of -0.4%.
13. French Trade Balance: Friday, 7:45. Contrary to Germany, France has a trade deficit, which stood on 4.6 billion in November. Another negative number is on the cards now: -4.5 billion.

* All times are GMT

[Samirofi]

EUR/USD Forecast Feb 8-12

EUR/USD finally burst out of range and rallied very nicely. Is there more in store? GDP figures stand out this week. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.


While PMIs failed to impress, the employment situation in the euro-zone is improving, with better data from Germany and Spain. However, the big rally can be attributed to the greenback’s crash that was mostly fueled by a worrying report for the services sector. Draghi could not halt the rally.

1. German Industrial Production: Monday, 7:00. The locomotive of the euro-zone suffered a slide of 0.3% in industrial output during November. A rise of 0.2% is expected now.
2. Sentix Investor Confidence: Monday, 9:30. This business confidence indicator dropped more than expected in January to 9.6 points, reflecting worries about the global economy. A drop to 7.2 points is on the cards.
3. German Trade Balance: Tuesday, 7:00. Germany’s wide trade surplus is one of the things that keeps the euro bid. After standing at 19.7 billion euros in December, a similar figure is likely: 19.4 billion.
4. French Industrial Production: Wednesday, 7:45. Also the second largest economy saw a drop in output, 0.9% in November. It could bounce now by 0.2% according to expectations.
5. Eurogroup meetings: Thursday. The Greek negotiations have been going on in the background and the first review of the third bailout is coming to a conclusion. This is the time to discuss Greece’s debt relief. Will we see the ministers discuss this sensitive topic? If so, Greece could move from the back-burner to the fore-front. However, they could kick the can down the road once again, as seen in previous events.
6. German GDP: Friday, 7:00. This is the preliminary release for Q4 2015. The No. 1 economy advanced 0.3% in Q3 2015, less than expected, and certainly did not lead. The publication is the key for the all euro-zone figure. Growth is expected to be identical: 0.3% q/q once again. Note that Germany published the final CPI (-0.8% exp.) and the WPI (+0.2% exp.) at the same time, but the GDP publication is far more important.
7. French NFP: Friday, 7:45. France saw no change in employment during Q3 according to the final figure. We could have a rise of 0.1% in the preliminary publication for Q4.
8. Italian GDP: Friday, 9:00. The third largest economy has been stagnant for long periods of time but did enjoy some growth in 2015. In Q3, it rose 0.2%. This is the last release shaping the all European figure. An accelerated pace of 0.3% is predicted.
9. GDP: Friday, 10:00. While this Flash figure is released after the German, French, Italian and Spanish publications, it still grabs headlines. In Q3 it was 0.3%, identical to Germany’s growth. A repeat at 0.3% is what economists are seeing.
10. Industrial output: Friday, 10:00. Also here, the publication follows the individual states but is still noteworthy. A drop of 0.7% was recorded in November and a bounce of 0.7% is now predicted.

* All times are GMT