The new trading week, which is the 20th one in 2019 started with the resumption of a trade war between the US and China. On Friday, 10 June 2019 the US introduced increased tariffs on Chinese goods to the United States from 10% to 25%. During the European trading morning on 10 June, 2019, at 9:21 CET, the EUR/USD global currency pair traded on Forex at an exchange rate of US$1.1228 per EUR with a daily EUR depreciation of – 0.04% of the exchange rate.
During the European trading morning on 13 May, 2019 the US dollar strengthened against some European currencies, namely against the EUR by + 0.04%, but also against the CZK by + 0.19% but it also weakened against the GBP by – 0, 03% and especially against JPY by – 0.25%. Overall, according to the US Dollar Currency Index (DXY), which compares the US dollar with another six major world currencies, it showed a drop of – 0.03% of the point value to US$97.30 points.
This week investors expect the following major events that could affect the trend of global financial markets:
FED Members’ Speeches
On Tuesday, May 14, 2019, the major US central bank Federal Reserve System (FED) officials, such as Richard H. Clarida, Vice Chair of the Board of Governors of the FED, will be speaking along with John C. Williams, Vice-Chairman and Permanent Member of the Federal Open Market Committee (FOMC). Investors closely monitor these speeches in terms of any possible verbal interventions and are looking for any signs of changes in the monetary policy of the FED in relation to US interest rates.
Gross Domestic Product (GDP) in Eurozone
These data are a measure of the total value of goods and services produced in the euro area. GDP is the most comprehensive indicator of economic performance and provides a key insight into the driving force of the economy. These data will be published by Eurostat at 11:00 CET on Wednesday, May 15, 2019. According to economic rapporteurs, following the economic analysts, GDP growth is envisaged to return at the same rate as in the previous period – by + 0.4% on a quarterly basis and by + 1.2% year-on-year.
Speech by the Head of the Central Bank of Germany
On Thursday, May 16, 2019, after 10:00 CET, the President of Bundesbank, Jens Weidmann, is expected to give his speech. According to financial strategists, considering country’s status in euro area and its economy’s central position vis-à-vis the Euro, the Bundesbank’s position is considered significant. If Mr. Weidmann’s speech suggests any conclusions on a monetary policy or a clear economic assessment in relation Germany’s or the euro area’s GDP, a higher volatility of the euro exchange rate vis-à-vis other world currencies can be assumed, especially against the US dollar. If in this speech Mr. Weidmann calls for a tightening of monetary policy vis-à-vis the European Central Bank (ECB,) this can be seen as a positive signal for the Euro.
The Euro area CPI
This consumer price index in the Economic and Monetary Union (EMU) of the European Union is a key and main index of inflation in EMU. The data of this CPI index in EMU will be published on Friday 17 May, 2019, at 11:00 CET and according to economic analysts, annual inflation is expected to be unchanged roughly at 1.7% year-on-year and analysts estimate the monthly inflation rate for April 2019 to increase from 0.8% to one percent.