European FX Outlook: Trade balance data and consolidation ahead for the Eurozone
|What you need to know before markets open:
- No important macro data are scheduled for Monday in Europe with the US banks closed in observance of Martin Luther King Day.
- The Bank of Japan governor Haruhiko Kuroda sounded positive of return of the inflation to the target and confirmed that the Bank will maintain Qualitative and quantitative easing with yield curve control in place as long as needed.
Monday’s market moving events
- The Eurozone trade balance is expected to reach a surplus of €28.2 billion in November.
- The US banks are closed for a national holiday on Monday.
Major forex market movers
- The EUR rose as much as 1.2% to the highest level since 2014 on optimism about German political parties reaching the breakthrough agreement on possible coalition government formation.
- The GBP was also dragged higher rising 1.3% against the US Dollar rising to fresh post -Brexit high.
Friday’s macro summary
- China’s trade balance reached an above expectations surplus of $54.7 billion in December with exports rising 10.9% and imports rising 4.5% in the US Dollar terms.
- French inflation rose 0.3% over the month while decelerating to 1.2% y/y in December.
- Spanish inflation remained unchanged in December while rising 1.2% y/y on the harmonized basis.
- The US core retail sales rose 0.4% m/m in December while increasing 5.4% y/y.
- The US CPI decelerated to 2.1% y/y in December in line with expectations, but core CPI ticked unexpectedly up to 1.8% y/y
- German central bank has decided to include the Chinese yuan in its own reserves.
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