EUR: Eyes on ZEW and Ukraine headlines – ING
This morning we'll see an important gauge of the impact on eurozone sentiment of the US-EU deal in the German ZEW release for August. Consensus is for a deterioration in both the current situation (from -59.5 to -67) and the expectations gauge (from 52.7 to 39.5), ING's FX analyst Francesco Pesole notes.
Risks skewed to a test of the 1.150 support
"Remember that the ECB does incorporate activity surveys into its economic assessment, and should a ZEW fall be followed by drops in IFO and above all PMIs, some dovish dissent in the ECB may start to remerge."
"But that is more a story for September given the lack of ECB communication in August and a still muted inflation backdrop. For now, the euro continues to be affected (albeit not in great magnitude) by the Russia-US headlines."
"We expect today's US CPI to bring EUR/USD back below 1.16 with risks skewed to a test of the 1.150 support if the Putin-Trump summit yields few results on Friday."
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