- Global stock markets finished lower following the Fed’s latest Meeting Minutes affirming its gentle approach in the current environment. With that, the chances of a rate cut in the short term rises, making the dollar weaker.
- Global stock markets exhibited a mixed day, but the uncertainty on trade and a dovish Fed pushed the US indices into the red. With that, the Nasdaq closed lower 0.45%, the DJIA 0.39% and the SPX 0.28%.
- Forex markets were relatively stable with risk pairs receding under pressure and the dollar grinding higher.
- Crude oil took a big hit as US inventories climbed and trade concerns extended to pressure demand. WTI dropped more than 3% to conclude the day at $62.30 on Wednesday.
Key Economic Events
Looking ahead to the economic calendar, the Euro is in for a busy day with German Final GDP q/q, and manufacturing & services PMI figures which will be driving the market sentiment along with the ECB Monetary Policy Meeting Accounts and European Parliamentary Elections later in the day.
German Final GDP
Destatis will be releasing the GDP figures at 6:00 GMT with a positive forecast of 0.4%. Last month, the release came in showing a 0% GDP growth, which has now been revised. Anyhow, the GDP growth rate of 0.4% is on the radar.
Market PMI Survey
Here we notice a closer look into Germany’s industrial economic figures – a significant drag on the nation’s economy. Previous month’s PMI hit lows not seen since 2012. Moreover, projections are for even worse this time around.
French Flash Services & Manufacturing PMI – 7:15 GMT
It’s forecast to show a slight rise in services PMI from 50.5 to 50.7. Whereas, the manufacturing PMI is also expected to grow from 50 to 50.1.
German Flash Manufacturing & Services PMI
The worrying factor is that the output and new orders that are continuing to contract. This indicates that German manufacturers are struggling to sell their products.
The German flash services PMI is expected to drop from 55.7 vs. 55.2. While the flash manufacturing PMI still stays at 44.9, which is far away from the benchmark 50. A further decline in Germany’s industrial outlook would be harmful to the Euro. However, the market might be further concerned if there is a drop in the services sector, which is keeping the economy afloat for the moment.
Ifo Business Climate
The next significant figure out of Germany that could produce some volatility is the Ifo Business Climate Survey. We can assume this to stay in contraction territory at 99.3, a marginal rise from 99.2 prior.
The trade war might have affected the results lately. A slip below 100 will be considered bad for the Euro while above 100 can bring bulls for the Euro.
European Parliamentary Elections
Over 400 million Europeans are going to the polls this week in all 28 EU countries to elect 751 members of the European Union Parliament to new five-year terms.
- Britain and the Netherlands vote on Thursday, May 23
- Ireland votes on May 24.
- Latvia, Malta, and Slovakia vote on the 25th.
- In the Czech Republic, voters have two days to get to polling stations, the 24th and 25th.
- 21 of the EU’s 28 members go to the votes on May 26, a Sunday, including France, Germany, and Poland.
ECB Monetary Policy Meeting Accounts
The European Central Bank left its policy steady but repeated that risks are moving to the downside. While some economic events have been growing, uncertainty continues to stay high in light of the US-Chinese trade war, Brexit, and other factors. The report will probably repeat a cautious standpoint.