The euro declined against the dollar on Thursday as the Non-farm Payroll report from the US came way below the expected. The Unemployment rate was also down which made the USD slip against its revel currencies Euro, Japanese Yen and Sterling. Brexit discussions strengthened by EU Chief Negotiator Barnier's comment that they are prepared to offer the UK a "super charged" free trade deal that is more inclusive than any agreement offered before. Unfortunately, this means they will be rejecting Prime Minister May's demand for frictionless trade, so the Brits may not happy with the deal, so if PM May feels that the offer falls short, Brexit negotiations could break down again.

Looking ahead, the economic calendar is relatively light this week. A major focus is on how US treasury yields are going to extend the uptrend after taking out key resistance level last week. Also, US inflation data could have a hand on the momentum of yields. In turn, strength in yields might continue to pressure global equities, which even US indices tumbled towards the end of last week. And of course, China is back from holiday and could immediate face a disastrous open in its stock markets. And, it’s uncertain how far Brexit optimism could take Sterling to.

">
mask Week Ahead | Euro & GBP bounces back against Bulls on Positive Brexit Negotiator Comments

07/ 10/ 2018

Week Ahead | Euro & GBP bounces back against Bulls on Positive Brexit Negotiator Comments

8th October 2018 - 12th October 2018

Monday

  • USD US Market Closed COLOMBUS DAY
  • CAD Canada Market Closed THANKSGIVING DAY
  • JPY Japan market Closed HEALTH AND SPORTS DAY
  • EUR German Industrial Production

The week will start with only one mid-tier economic data from the Euro Zone.  As the US market closed, there will be less volatility in the market.

German Industrial Production is the only mid-tier report coming from the Euro zone which measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector.

 

Tuesday

  • EUR Trade Balance

Tuesday will be another dull day for the market with no major economic data's.

Trade Balance is a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the EUR. If a steady demand in exchange for German exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the EUR

 

Wednesday

  • EUR Non-monetary policy's ECB meeting
  • GBP Manufacturing Production & GBP Gross Domestic Product

The day starts with the mid-tier report from the Euro Zone which is the Non-monetary policy's ECB meeting. Manufacturing Production is significant as a short term indicator of the strength of UK manufacturing activity that dominates a large part of total GDP. The major data for the day comes from the UK is GDP which is the measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity.

 

Thursday

  • EUR ECB Monetary Policy Meeting Accounts
  • USD Consumer Price Index Ex Food & Energy & USD Consumer Price Index

Thursday will be the day for USD. Two major reports from US will be out on Thursday. Euro zone will start the day with ECB monetary policy meeting accounts which contain an overview of financial market, economic and monetary developments. It's followed by a summary of the discussion, in an unattributed form, on the economic and monetary analyses and on the monetary policy stance. Consumer Price Index which will be a key indicator to measure inflation and changes in purchasing trends which will be a key indicator for US Economy & Interest Rate Decisions.

 

Friday

  • CNY Import, Export & Trade Balance
  • EUR German Consumer Price index & Germany Harmonized Index of Consumer Price

On the week closing, no major data are released. Mid-Tier data coming from China and Euro Zone will be the only reports. China will release the Import, Export, Trade Balance and the Foreign Direct Investment reports. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. Euro zone will release the CPI which is the main indicator to measure inflation and changes in purchasing trends.