EUR/USD Weekly Forecast - 25 June

Sunday, Jun 24 2018

EUR/USD remained depressed in the week, this time more due to trade than to Draghi’s words. The US is contemplating imposing tariffs on no less than $200 billion of Chinese goods, and this worsened the mood in financial markets, weighing on the euro. ECB President Mario Draghi hosted a conference in Sintra, Portugal with his American peer. Both central bankers had already had their say on markets beforehand and did not rock the boat too much.

The last week of June features inflation figures, the EU Summit, and other events.

Major events in the coming week:

German Ifo Business Climate: Monday, 8:00. IFO publication impacts the euro. In May, the Business Climate number stood at 102.2. A slight slide to the indicator is expected.
Monetary data: Wednesday, 8:00. The M3 Money Supply is at 3.9%, private loans rose by 2.9% y/y in April. A small acceleration could be seen in both figures.
EU Summit: Thursday and Friday. Leaders of the European Union meet to discuss various topics and Brexit tops the agenda. The EU and the UK were expected agree on the main topics of the Irish border and the Customs Union. A failure to agree may weigh on broader markets as well as Pound. In additions, the EU Summit will likely include a discussion on the trade spat with the US.
German Retail Sales: Thursday, 6:00. German sales jumped by 2.3% in April, far above expectations and ending four months of declines. For May, we could see a more modest change.
German GfK Consumer Climate: Thursday, 6:00. Expected to remain at May level of 10.7.
Spanish Flash CPI: Friday, 7:00. Spanish inflation jumped to 2.1% y/y in May, above the euro-zone figure. High energy prices likely kept it above 2% once again.
ECB Economic Bulletin: Thursday, 8:00. The ECB publishes the statistics that accompanied its rate decision meeting. It may provide further insights into developments in inflation.
German Import Prices: Friday, 6:00.
French Consumer Spending: Friday, 6:45. A bounce from the April drop (-1.5%) is likely in May.
French CPI: Friday, 6:45. Prices rose by 0.4% m/m in May. A smaller change is likely in June.
German Unemployment Change: Friday, 7:55. Germany continues to see falls in the number of the unemployed, 11K back in April. Another drop is on the cards.
German CPI: Thursday, 12:00. Prices rose in May by 0.5% m/m. A smaller rise is expected now.
Euro-zone inflation report: Friday, 9:00. Headline CPI rose to 1.9% y/y driven by energy prices, but core prices went back to normal with 1.1%. Small deviations are on the cards in June.