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German economic sentiment takes centre stage

business-articlesGerman economic sentiment takes centre stage
German economic sentiment takes centre stage
  • Will a slump in German economic sentiment dampen hopes for the single currency?
  • Sterling could slide if Governor Mark Carney sounds dovish
  • New Zealand dairy prices to drive ‘Kiwi’
Plummeting German economic sentiment forecast to weigh on EUR

On Monday the euro edged up as data revealed that wages in the Eurozone rose during the first quarter of 2019.

Eurostat revealed wages rose 2.5% between January and March compared to the same quarter in 2019, making this the biggest increase since 2010 when it started collecting data.

Meanwhile, we could see the single currency slide this morning following ZEW’s German economic sentiment survey, which is expected to show a sharp downturn.

Will a dovish Carney put pressure on Sterling?

On Monday, the pound extended a six-week losing streak against the single currency as fears that the UK was headed towards a no-deal Brexit continued, with front-runner Boris Johnson receiving further support.

Meanwhile, this afternoon Bank of England (BoE) Governor Mark Carney is expected to take part in the European Central Bank (ECB) Forum on Central Banking alongside President Mario Draghi and Former Chair of the US Fed, Janet Yellen.

If Carney discusses monetary policy and highlights the risks a no-deal Brexit could cause, it is likely this will weigh on the Pound.

New Zealand Dollar exchange rates may slip if dairy price index stumbles

At the start of the week the New Zealand Dollar edged up despite risk appetite remaining fragile thanks to increased global trade tensions and the fears of a slowdown.

Further trade tensions emerged as India’s Ministry of Finance said its decision to impose tariffs on 28 US products, some as high as 70%, was ‘in the public interest’.

Meanwhile, the New Zealand Global Dairy Trade Price Index could weigh on the ‘Kiwi’. If the dairy auction reveals that dairy prices have slumped for the third consecutive month, it could dampen sentiment in NZD.

Upcoming Data:

Tuesday 18th June 2019
10:00     EUR German ZEW Economic Sentiment (June)
10:00     EUR Consume Price Index (May)
15:00     GBP BoE Governor Carney Speech
n/a         NZD Global Dairy Trade Price Index

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