The euro faces a packed schedule of economic data points this week, putting its startling gains this month — 2% against the pound and 5% against the US dollar – at risk of a correction.
A rare gap in major news gives the pound a chance to take stock. However, ongoing volatility and the scramble to navigate the new economic environment means that we should still expect some volatility, particularly considering how quickly things are changing.
On that topic, the Labour government had been coy on post-Liberation Day trade alliances, preferring instead to hedge its bets between the USA, China and the European Union (EU). On Friday, Chancellor Rachel Reeves hinted that the EU was the most logical and “arguably even more important” trading partner.
More scattergun policy from across the Atlantic made it easier to see her logic. President Donald Trump’s suggestion that a trade deal with China was near was knocked back by Beijing officials. However, the US dollar did benefit from the evidence that the commander in chief was susceptible to pressure from financial markets, at least to some extent .
Today is light on data with a handle of sovereign debt auctions perhaps the pick of the action. Things kick into gear tomorrow with the German GfK consumer confidence report, along with Spanish GDP estimates and the JOLTs job report from the US.
Germany, Italy and the eurozone as a whole will also be reporting GDP figures on Wednesday. America will do the same before the Core PCE price index study for March – arguably even more significant given the Federal Reserve’s interest in those particular figures – arrives in the afternoon.
More jobs data from the US rounds out the week along with the eurozone’s flash inflation read for April.
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