European FX Outlook: Swiss National Bank set to hold on loose

What you need to know before markets open

• American conservative commentator, economic analyst, television personality, and newspaper columnist Larry Kudlow said he has accepted a job as Trump's top economic adviser, replacing Gary Cohn.
• The US is pressing China to cut trade surplus by $100 billion, sources from White House report.
• Swiss central bank highlights Thursday although no change in monetary policy is expected.

Thursday’s market moving events

• French inflation in February is expected to fall -0.1% m/m.
• Swiss National Bank is set to keep the monetary policy unchanged with Interest on sight deposits at the SNB is to remain at –0.75% and the target range for the three-month Libor unchanged at between –1.25% and –0.25%.
• The Empire State manufacturing index is seen rising to 15.0 in March.
• The US initial jobless claims are expected to reach 226 K in a week ending March 9.
• The Philadelphia Fed manufacturing index is forecast to decelerate to 23.0 in March.
• The ADP employment survey for Canada is expected to increase 10K in February.

Major market movers

• The US Dollar recovered slightly on Wednesday after Washington DC shakeup related fall previous day, but gains were mild.
• With SNB seen holding rates steady and other macro indicators due on Thursday being of rather a second tier, market sentiment is likely to drive FX rates, not the fundamentals.

Wednesday’s macro summary

• China’s industrial production rose 7.2% y/y in January, beating the expectations.
• China’s retail sales rose 9.7% y/y in January.
• German final HICP rose 1.2% y/y in February, meeting the market estimate.
• ECB President Mario Draghi said that the inflation is way below the ECB target and the Euro’s strength could weigh on inflation down the line.
• The ECB chief economist Peter Praet confirmed in a speech in Frankfurt that the Bank had adjusted the monetary policy stance by removing so-called APP easing bias from the official statement.
• The Eurozone employment rose 0.3% Q/Q in the final quarter of 2017, meeting the market forecast.
• The Eurozone industrial production fell 1.0% m/m in January while increasing 2.7% y/y falling short of expectations.
• The US retails sales control group rose disappointing  0.2%m/m in February. Total retail sales reached $492.0 billion in February, falling -0.1% m/m.
• The US core PPI is forecast to rise 0.2% m/m in January while accelerating 2.5% y/y.
• ECB's Villeroy said there is a broad convergence of market expectations with governing Council views.
• New Zealand GDP rose 0,65 Q/Q in December quarter while rising 3.1% y/y for the whole year of 2017 as business services drove the output higher.