[ad_1]
- German and eurozone GDP slowed and missed the estimates
- Markets await US Core PCE Price Index, German CPI
EUR/USD is trading at 1.0983 in the European session, down 0.39% on the day
German CPI expected to remain steady
The trading week wraps up with key inflation releases on both sides of the pond. Germany, the bellwether of the eurozone, releases CPI later today. The markets are expecting the April release to stay unchanged at 7.8% y/y. On a monthly basis, CPI is expected to slow to 0.8%, down from 1.1%. The release takes on added significance as the ECB holds a policy meeting on May 4th. The ECB is expected to remain aggressive and deliver a 50-basis point hike, but if today’s German data and eurozone CPI prior to the meeting are below expectations, then the odds of a 25-bp hike would likely increase.
Germany and the eurozone released first-quarter GDP today, and the data was soft. Germany’s economy improved to 0.0% q/q, better than the Q3 read of -0.4% but shy of the estimate of 0.2%. Eurozone GDP was negligible at 0.1%, following 0.0% in Q4 and missing the estimate of 0.2%. The disappointing numbers have pushed the euro lower today.
In the US, the markets are anxiously awaiting the Fed rate decision next week. There is a blackout in effect on Fed members making public remarks, which means that the markets are pricing rates largely on key economic releases leading up to the meeting. Today, the US releases Core PCE Price Index, which is considered the Fed’s favorite inflation gauge. The markets expect the index to stay unchanged in March at 0.3% m/m, and any surprises could move the dial on the US dollar as well as the pricing of a rate hike. Investors will also be keeping an eye on Personal Spending and Income, which provide a snapshot of the strength of consumer spending. According to Fed Watch, the likelihood of a 25-bp hike is 88%, with a 12% chance of a pause.
.
EUR/USD Technical
- EUR/USD continues to test support at 1.1023. Below, 1.0966 is under pressure
- There is resistance at 1.1176 and 1.1423
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
[ad_2]
Source link