High Impact Economic Data for the upcoming week (All Times GMT+2)
Week Ahead - Jan 25-31
Following Alexis Tsipras and Syriza's landslide victory in the Greek elections the future of the Euro and the common currency union has been thrown into turmoil. Severe economic conditions have persisted in Greece since 2008 and the European measures and bailouts put in place to alleviate the situation have been unable to return the Greek economy back to growth. Unemployment has remained chronically above 25%, the Stock Market has lost 84% of its value and the national average wage is €600 p/m. Last night’s election produced a convincing outcome in support of Tsirpas who has pledged to renegotiate the path that Greece is pursuing particularly with respect to Troika, austerity and the national debt.
On Monday the week begins with German IFo Business Climate data. The release is expected to reveal an improvement of conditions and expectations following weakness in the measure over recent months. On Tuesday Preliminary GDP in the UK is set to show a slowdown from a rate of 0.7% growth last quarter to 0.6%, and this may weigh on the Sterling Pound. In the US on Tuesday markets will focus on the Core Durable Goods Orders and CB Consumer Confidence with healthy improvement expected in the above data while New Home Sales are set to advance from 438k to 452k. On Wednesday interest rate decisions are on the agenda in the US and in New Zealand. The FOMC Statement and the Federal Funds Rate will be released simultaneously at 19:00GMT with rates expected to stay on hold at <0.25%. In New Zealand the interest rate is presently at a much more respectable 3.5% and following the surprise decision by Canada to lower its main lending rate by 25 basis points in the face of a commodity price slump it is worth being prepared for a possible surprise rate cut from the RBNZ. On Thursday German Preliminary CPI is set to slump to -0.8% from a rate of 0.0% last month and Unemployment Claims in the US are set to show an improvement from 307k to 301k although this measure has been weakening in recent weeks and months. Friday will be an eventful trading day as EUR CPI Flash Estimate is set to show a deepening of deflation in the Eurozone while Canadian data is expected to show a rate of -0.1% growth for December and in the US Advance GDP is forecast to decline from a rate of 5.0% q/q to 3.0% q/q. Assuming US growth declines over coming quarters this will have negative implications for the global economy.
EURUSD 5 Minute Chart
EURUSD Weekly Chart
Crude Oil 2 Hour Chart
Events to Watch this Week
The main factors that will affect the fx markets and trends next week will be the:
- EURUSD has fallen to as low as 1.1097 following the biggest weekly decline since September 2011. From a weekly open price of 1.1561 to a low of 1.1114 the pair slumped 447pips in a week. Can the EUR recover some of its losses this week or is the trend set for further declines.
- After falling as low as $44.21 in early January Crude Oil held above the lows last week in a sign that the market had sufficient strength to stabilize. Following the Greek election outcome the crude oil market opened with a gap lower and price fell by 2% in early trading. A low of $44.32 a barrel was reached holding just above the low of $44.21. Crude Oil has declined aggressively and this slump has the potential to fuel existing geopolitical conflicts and create new threats. Analysts have been predicting $20-$30 a barrel. What will this week deliver?