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Quiet data day leaves markets to focus on German trade balance

business-articlesQuiet data day leaves markets to focus on German trade balance
  • EUR - German trade surplus expected to grow
  • SEK – Swedish Riksbank monetary policy meeting minutes
  • USD - US JOLTs job openings forecast to climb
Euro (EUR) exchange rate movement dependent on German data

Today’s primary euro drivers will be a fleet of German ecostats that will include the current account figures, industrial production readings and the March balance of trade results.

Investors currently expect all of these readings to print positively, with a rise in the trade surplus forecast from €18.4bn to €24.5bn and an effective recovery in industrial production from -1.6% to 1.1%.

It is possible, however, that last week’s disappointing Eurozone growth and inflation readings will still weigh on demand for the single currency and negate the effects of any upbeat news from Germany.

This is largely because the possibility of a hawkish move from the European Central Bank (ECB) is still entirely off the table for the foreseeable future.

Riksbank minutes expected to keep lid on Swedish krona (SEK) exchange rates

The Swedish krona (SEK) could continue to encounter problems today as markets respond to the release of the minutes from the Swedish Riksbank’s latest monetary policy decision.

Given that the meeting was decidedly dovish it is highly likely that the minutes will be the same, with the Riksbank’s ongoing struggle with low levels of inflation liable to dominate the discussion.

Nonetheless, investors will be looking for any signs of hawkish intention amongst policymakers, particularly with a rate hike still being possible before the end of the year.

Any dovish reinforcement could send the krona lower, whilst hawkish sentiment could give it a small boost.

US job openings and economic optimism assessments liable to influence USD exchange rates

The ‘Greenback’ sailed higher last week, rising on a surprising 3.9% unemployment print and a sizable jump in non-farm payrolls.

Whether this will continue today, however, could be dependent on the results of the monthly IBD/TIPP economic optimism index – a gauge of confidence amongst consumers, workers and investors regarding the pace and direction of the US economy – and the job openings and labour turnover survey (JOLTS).

Investors currently expect the JOLTS result to climb, reflecting an ever-tightening labour market.

The economic optimism reading could come under pressure, however, in the form of ongoing trade anxieties between the US and China.

Upcoming data

Tuesday 8 May

07:00 EUR – German Industrial Production (March)
07:00 EUR – German Balance of Trade (March)
08:30 SEK – Swedish Monetary Policy Meeting Minutes
08:30 GBP – UK Halifax House Prices (April)
15:00 USD – US JOLTS Job Openings (March)
15:00 USD – IBD/TIPP Economic Optimism (May)
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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