Busy economic calendar ahead for the EU
This week it's all about the EU, ECB & € as a flurry of data releases are due before the month closes out. It's a bit of a 'make or break' time for the above, with all three in their own right under pressure. Firstly, there is a host of economic figures from the Euro-Zone being released that should keep the market volatile from Wednesday onward.
Confidence, GDP & inflation data are all due and the forecasts are not looking great. The EU's biggest contributor Germany, will be under the spotlight especially and this comes after Bundesbank this morning have suggested economic growth for the nation will slow significantly in Q4. Supply chain issues are causing huge concern, as well as high inflation that is expected to continue into next year. So, it may be a poor week for the Euro-Zone in terms of data, but be aware that we have been surprised before.
On inflation, the market will be watching to see if the ECB will react to inflationary pressures, particularly seen in Germany. The ECB have a huge problem with juggling many nations at one time, all with different inflation numbers. Any hint that rates may rise sooner than expected will strengthen the Euro, but on the other hand, if the stance remains the same, the Pound could gain.
It's clear the € is currently out of favour with traders. There is a lot of negativity around and the Euro is generally weak across the board. Judging by the charts and data/speeches due out, there is scope for more weakness yet, a feeling the £ knows all to well. It's the first time since the pandemic really that the single currency has looked vulnerable.
£-€ rates saw some weekend profit-taking as 0.4% was lost, but since the market re-opened this morning the position has been reversed. An interesting week ahead to say the least with of course the UK Autumn Budget potentially causing some volatility too.