EUR: Hiccup in the European manufacturing sector?
Fundamental bias: Mildly bearish
Price action has all the hallmarks of a short, sharp position adjustment – suggesting the bulk of the correction may have occurred. Yet we feel Fed speak could see EUR/USD correct a little further lower this week. Look out for speeches from ECB President Christine Lagarde and board member Isabel Schnabel – likely to repeat remarks by Chief Economist Philip Lane distancing the central bank from any early hawkishness.
In terms of the data calendar, the eurozone focus will be on the flash June PMIs and the German Ifo. We noticed this week that the Ifo institute cut their 2021 German GDP forecast to 3.7% from 3.3% on the back of supply bottlenecks. Let’s see whether manufacturing sentiment sours a little in the June surveys.
Price action has all the hallmarks of a short, sharp position adjustment – suggesting the bulk of the correction may have occurred. Yet we feel Fed speak could see EUR/USD correct a little further lower this week. Look out for speeches from ECB President Christine Lagarde and board member Isabel Schnabel – likely to repeat remarks by Chief Economist Philip Lane distancing the central bank from any early hawkishness.
In terms of the data calendar, the eurozone focus will be on the flash June PMIs and the German Ifo. We noticed this week that the Ifo institute cut their 2021 German GDP forecast to 3.7% from 3.3% on the back of supply bottlenecks. Let’s see whether manufacturing sentiment sours a little in the June surveys.