Daily Briefing, June 18 – Economic Events Outlook, Eyes on Eurozone - Forex News by FX Leaders
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Daily Briefing, June 18 – Economic Events Outlook, Eyes on Eurozone

Posted Tuesday, June 18, 2019 by
Arslan Butt • 3 min read

Good morning, fellas.

On Monday, the greenback traded slightly lower as weaker economic data kept the gains in check ahead of the critical economic events this week. Despite the bearish bias, the dollar still stays near the two-week high set earlier in the session as investors wait to see how dovish the Federal Reserve is expected to be at this week’s policy meeting.

Overall, the forex market is quiet, as investors hesitated to put on big trades before the Fed’s two-day meeting, a meeting of European Central Bank policymakers in Portugal and the Bank of England’s interest rate decision on Thursday.

Looking ahead at today’s economic events, the docket is fully loaded with European economic events. Let’s take a look.

Key Economic Events Today

EUR – ECB President Draghi Speaks – 8:00 GMT
During the European session, the ECB President Mario Draghi is due to speak at the ECB Forum on Central Banking, in Sintra. Once again, he isn’t expected to speak specifically about the monetary policy, which is why the event may have no impact on the market. It’s Mario Draghi, so we should keep an eye on the event to capture any surprising remarks.

EUR – German ZEW Economic Sentiment – 9:00 GMT
The Zentrum für Europäische Wirtschaftsforschung is expected to drop to -5.7 vs. -2.1 beforehand. Fellows, it’s a survey of about 300 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany.

The figure used to be in the range of negative 15 – 20 in Q4 2018 and Q1 2019. It seems to have improved a bit, but the performance is still not up to the mark. German institutional investors are losing confidence in the economy. So, that’s another reason to expect a continuation of bearish sentiment in Euro.

EUR – Eurozone’s Final CPI y/y – 9:00 GMT
The Eurostat will be releasing the final consumer price index for Eurozone. It shows a change in the price of goods and services purchased by consumers.

Eurozone’s inflation is still below the 2% target, giving ECB a reason to keep monetary policy dovish. Since the beginning of 2019, European inflation is shaky, falling from 2.1% to 1.2% in May whereas economists are expecting no change in June.

Why is Inflation Important?
Consumer prices account for a majority of overall inflation. Inflation is significant to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. A rise in inflation boosts the sentiments of hawkish monetary policy and vice versa.

EUR – Final Core CPI y/y
Likewise, the core CPI is also expected to drop to 0.8%% from 1.3% beforehand. The core CPI also shows a change in the price of goods and services purchased by consumers, excluding food, energy, alcohol, and tobacco.

EUR – German ZEW Economic Sentiment – 9:00 GMT
Fellows, it’s a survey of about 300 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany. The data is due at 10:00 GMT, but I’m afraid it doesn’t look good for the Euro. Economists are expecting another drop of -25 which is lower than the previous -24.1 figure. The single currency Euro can trade under pressure today.

GBP – BOE Gov Carney Speaks – 14:00 GMT
The BOE Governor Mark Carney is due to participate in a panel discussion at the ECB Forum on Central Banking, in Sintra. In the panel discussion, central bankers mostly discuss the global challenges and the potential remedies that they all can take. Carney isn’t expected to talk about interest rates.

Well, that’s pretty much it on fundamentals side, but buckle of technical setups, as we are already in live trades. Good luck!

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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