EUR news

Moderators: mntiwana, mrtools


Germany Q4 GDP flash qq SA +0.4% vs +0.5% exp

Germany Q4 GDP flash report 14 Feb

  • +0.1% prev revised down from +0.2%
  • yy WDA +1.7% vs +1.8% exp vs 1.7% prev
  • yy NSA +1.2% vs +1.4% exp vs 1.55 prev

German stats office says:

  • Q4 growth mainly driven by increased state spending, more pvt consumption and higher construction investment
  • growth held back by foreign trade with imports growing much more than exports


Spain January CPI final mm -0.5% as expected

Spain January CPI final readings 15 Feb
  • -0.5% prev
  • yy 3.0% as exp/prev
  • HICP mm 1.0% vs -0.9% exp/prev
  • yy 2.9% vs 3.0% exp/prev
  • core CPI mm -1.5% vs +0.1% prev
  • yy 1.1% as prev


EUR/USD: Targets For A Decline In H1 Before A Rally In H2 - BofA Merrill

It is all about the USD and about President Trump’s policies for the EUR for now. Indeed, the sell-off of the Trump trades so far this year, following some profit-taking and market concerns for US trade protection, has supported the EUR. This is despite Draghi being dovish in the January ECB meeting and emphasizing the importance of core inflation for the ECB policy reaction function and also despite political risks in some Eurozone countries ahead.

We remain constructive on the USD, expecting the policies of the new US administration to focus more on fiscal stimulus and deregulation and less on trade protection. This explains our bearish EURUSD projections for H1.


However, we expect ECB constraints to become a more important driver for the EUR in H2. The ECB minutes from the December meeting clearly reflected these challenges. The ECB is likely to announce QE tapering by the end of this year, as they appear unable to increase the issue limit or relax the capital key. Inflation is also on a rising trend, although to a large extent because of base effects. We therefore expect EUR/USD to gradually strengthen in the second half of the year. We are bullish EUR/JPY for the year, which is a good way to avoid US policy risks.

We expect EUR/USD to weaken to 1.02 by mid-2017. Risks to this projection appear balanced following the recent USD sell-off, as positioning is now cleaner. Expecting the ECB to announce QE tapering towards the end of the year, we see the EUR strengthening in H2, going back to 1.05 by end 2017 and to 1.10 in 2018, with upside risks.



Bank Of America Euro To Dollar Forecast - EUR/USD Exchange Rate At 1.02 In H1 2017

It’s All Riding on Trump in EUR USD Exchange Rate

For the time being “...it is all about President Trump’s policies” for EUR USD exchange rates, according to Bank of America Merrill Lynch (BAML).

January’s support in the euro to dollar rate was caused, in part, by the reversal of the post-US election ‘Trump Trade’, says BAML – that, together with fears of American protectionism and some general profit taking.

January’s euro rally continued in spite of ECB President Mario Draghi's dovish stance in the Bank’s January meeting, in which he emphasised the importance of core inflation for ECB monetary policy, and in spite of rising political risk in the eurozone.

The US dollar was unusually weak in January, recording its worst start to a year since 1987. The euro-dollar rate gained 2.7% in the first month of the year, and was up 4.3% from December’s lows.


EUR/USD forecast for the week of February 20, 2017, Technical Analysis

The EUR/USD pair initially fell during the week but found enough support near the 1.05 level to turn things around to form a hammer. The hammer of course is a bullish sign and I think that we will probably break a little higher from here. If we can clear the top of the weekly candle from the previous week, the market could go to the 1.10 level. Alternately, we breakdown below the bottom of the hammer from the week, I think that the market could go all the way down to the 1.03 level. This could be an interesting week.




Merkel suggests euro is too low for Germany (+ ECB comments)

German Chancellor Angela Merkel speaking at the Munich Security Conference

Made remarks suggesting the euro was too low for Germany:
  • "We have at the moment in the euro zone of course a problem with the value of the euro"
  • "The ECB has a monetary policy that is not geared to Germany, rather it is tailored (to countries) from Portugal to Slovenia or Slovakia. If we still had the (German) D-Mark it would surely have a different value than the euro does at the moment. But this is an independent monetary policy over which I have no influence as German chancellor."
Which sorta translates as don't blame Gemany, similar to Schauble last weekend
Also, European Central Bank board member Sabine Lautenschlaeger on European inf;lation:
  • "I'm very pleased to say, quite honestly, that we're close to our target of just under 2 percent. But what's important for me is that it's not a temporary
  • So it's really important to ascertain that there is a trend, that the inflation has really returned. So let's wait a few months so that we can be sure."
Lautenschlaeger in an interview with German Deutschlandfunk radio (Reuters)


EUR/USD Weekly Forecast February 20-24

EUR/USD traded in a volatile manner in the past week as early week losses were abruptly erased following a mid-week reversal. The net result was a marginal decline in the currency pair for a weekly loss of 17 points.

The reversal in the pair followed better than expected US retail sales and CPI data released on Wednesday. The consumer price index rose 0.6% in January, marking the largest increase since early 2013. This followed a gain of 0.3% in the prior month and was ahead of the analyst consensus for a rise of 0.3%. Retail sales rose 0.4% in January to beat the expectations for a gain of 0.1%.

The data triggered a quick drop in EUR/USD but losses were not sustained as support at 1.0520 triggered a sharp reversal. The pair ended the session in the green and extended the advance the next day. Support at 1.0520 has been respected through the consolidation that has taken place since 2015. The level caused a notable turn higher in early and late 2015 and elicited a bounce in late November 2016.

Fed chair Janet Yellen testified in front of Congress on Tuesday and Wednesday in the past week. The Tuesday testimony caused a dollar rally and a repricing of rate hike probabilities in the futures markets as she stated it would be “unwise” to wait too long to remove accommodation. The Fed chair warned that a delay could potentially lead to a recession if the central bank were forced to raise rates rapidly down the road. The rate hike odds for March and June rose sharply on her comments but pulled back in the late week with the March odds at 17.7% as of Friday’s close, up from 13.3% last week. June probabilities rose to 70% from a roughly one in two chance last week. Yellen has turned notably hawkish in her recent communication, shifting the focus to upside risks in monetary policy following an extended period of time of largely being considered a dove.
read more


Germany January PPI mm +0.7% vs +0.3% exp

Germany January PPI report 20 Feb

  • +0.4% prev
  • yy +2.4% vs 2.0% exp vs 1.0% prev

Stronger PPI data which will filter through to headline CPI in due course.


Euro-zone Consumer Confidence Declines to 3-Month Low Of -6.2 For February

The flash reading for Euro-zone consumer confidence indicator declined to -6.2 for February from a final -4.9 in January and compared with expectations of an unchanged reading at -4.9.

This was the weakest reading for three months and also the first monthly deterioration since August 2015.

Underlying Euro-zone data releases have been generally encouraging with further gains in employment which should have boosted confidence in the outlook.

There will be speculation that concerns over Euro-zone political tensions had an impact in undermining confidence, although it looks likely that the sharp rise in headline inflation had a bigger potential impact in undermining sentiment.

With wage increases still relatively subdued, any significant increase in inflation will have an important impact in undermining potential consumer purchasing power as real income growth weakens. There is, however, also the possibility that expectations of higher inflation will bring forward purchases of consumer durables and the data breakdown will be watched closely when the full data is released.

Expectations of weaker growth in real spending would be important in encouraging the ECB to look through any increase in inflation triggered solely by rising energy prices.

An important focus for markets will be whether there is significant upward pressure on wages over the next few months which would have a wider impact in pushing up inflation. Unless wages growth accelerates, consumer spending growth will tend to slow.
read more


Euro-Zone January CPI Inflation Confirmed At 1.8%, Core Rate 0.9%

The final reading for January Euro-zone consumer prices recorded a 0.8% decline in prices on the month while the annual rate increased sharply to 1.8% from 1.1% previously given the base effect of a much sharper decline in prices for January 2016.

The annual rate of 1.8% increased from 0.3% in January 2016 and was the highest rate since the first quarter of 2013.

All Euro-zone economies also recorded a positive inflation rate for the first time since February 2013.

The annual rate of 1.8% was in line with the flash estimate released at the end of January and also in line with consensus expectations.

The core inflation rate remained at 0.9% which was in line with expectations and compared with a rate of 1.0% seen in January 2016.

Energy prices rose 8.1% on the month to give an annual increase of 2.5% while food and drink prices rose 1.8% over the year.
read more

Who is online

Users browsing this forum: CommonCrawl [Bot] and 0 guests