The market movers in the past week have been many, but they all focused on Friday.
The most important news regarded the publication of the Eurozone PMI indices: the PMI manufacturing index rose from 56,2 to 56,8 and analysts had expected a figure of 56; the composite PMI passed from 56,4 to 56,7. Even in this case the expectations of 56,3 were met; the PMI of services also rose from 56 to 56,2. In this case the expectation of 56 were unfulfilled.
The other macroeconomic news about the European Union was the inflation and the trade balance.
Inflation has confirmed analysts’ expectations remaining at 1,5%, exactly as observed in the previous survey. Inflation on a monthly basis marked a + 0,8% which confirmed the expectations and instead showed an increase over 0,4% of the previous survey.
The main consumer price index also recorded a + 1,4% on a monthly basis and a + 0,7% on an annual basis.
The trade balance of the euro zone recovered in February. The trade surplus was € 17.8 billion, against analysts € 16.2 billion. The previous month, however, the trade balance was in deficit of 600 million of euros.
Of great importance was also the OPEC meeting on Saturday, April 22, in which it was decided to extend the cuts of oil production sanctioned in the historic Vienna agreement.
The Organization of the Petroleum Exporting Countries (Opec), Russia and other producers agreed to cut production by 1,8 million barrels per day for six months from January 1 this year to support the market. Opec ministers besides their non-Opec counterparts are scheduled to meet on May 25.
Here the key points of Vienna agreement of November 2016. The cut in OPEC production was of 1,2 million barrels per day with a maximum production target of 32,5 million barrels a day. Non-OPEC production was cut by 600.000 barrels per day (of which only 300.000 in Russia); Indonesia had been suspended by OPEC for the country’s difficulties and Libya and Nigeria were excluded from the cuts.
On the weekend, it was the time for the usual data on the initial requests for US unemployment benefits that have risen in the past week.
The market mover has gone from 234.000 requests for the previous survey to 244.000 today. Analysts predicted an increase in unemployment benefits of 242.000, so the expectations were disappointed.
Next week, geopolitical and macroeconomic events will shake again the currency market following the election results in France.
The most important market movers are certainly the April ECB meeting and the interest rate decision, followed by President Mario Draghi’s regular press conference. Investors will surely know the intentions of the European Central Bank: tapering or rising interest rates by the end of the year?
In this context, the Euro is preparing to live a hectic week, including the outcome of the first round of the French election that sees anti-EU candidate Marine Le Pen, who passed to the May ballot, against Emanuel Macron.
On the front closely related to the Economic Calendar, the predominant market makers will be the first estimates of first quarter 2017 GDP for the United States and the United Kingdom.