Thursday, 11th April 2019
- German CPI m/m (Mar) Final
- French CPI m/m (Mar) Final
- French HICP m/m (Mar) Final
Friday, 12th April 2019
- Spanish CPI (YoY) (Mar) Final
- Spanish HICP (YoY) (Mar) Final
- Eurozone Industrial Production m/m (Feb)
The European majors managed to find positive territory on Wednesday. Leading the way on the day was the DAX, which gained 0.45%. Not far behind were the CAC40 and EuroStoxx600, which rose 0.25% and by 0.26% respectively.
In spite of the upside through the day, the European majors remain in negative territory for the current week, with the DAX down by 0.86%.
There were no material stats for the markets to consider through the day to provide direction. The lack of stats left the ECB monetary policy decision and press conference in focus.
While the ECB left interest rates unchanged, as had been anticipated, President Draghi maintained his dovish outlook. Draghi noted that Eurozone risks remained titled to the downside. The negative outlook came in the wake of the latest IMF growth forecasts that were largely brushed aside by the markets.
An expectation of the EU granting Britain with a further Brexit extension provided support to riskier assets through the European session.
The Day Ahead
It’s a relatively quiet day on the economic calendar. Ahead of the European open, finalized March inflation figures out of Germany were released, which were in line with prelim figures. According to DeStatis, the annual rate of inflation softened from 1.5% to 1.3% in March. Month-on-month, consumer prices rose by 0.4%.
Later this morning, finalized inflation figures out of France will also provide direction to the EUR ahead of the European open. Softer inflation figures would be considered positive for the equity markets. Following the ECB press conference, however, the impact will likely be limited. The ECB is unlikely to be taking a more hawkish stance on policy anytime soon, even with a pickup in inflation.
While the economic calendar is on the more quiet side, support for riskier assets will come from the latest Brexit extension, though much will now depend on Theresa May and Parliament.
A no-deal departure from the EU would have certainly rattled the global financial markets, had the EU refused Theresa May’s extension request.
Elsewhere, any chatter from the Oval Office on EU tariffs will also need to be factored in. We’ve yet to hear of the EU’s troubled auto sector being pulled in, any expansion to the tariff list and the majors will likely feel the pressure.
While geopolitics will have an influence, the lack of stats will likely place a greater emphasis on earnings through the day.
At the time of writing, the futures pointed to a mixed open. The DAX30 was down 17points, while the CAC40 was pointing to a 12 point gain at the open.
This article was originally posted on FX Empire
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