Unfulfilled Expectations on Greek Inflation and European Market Movers

The events of the past week are not much of help to binary options traders because the market movers were few and insignificant.

The week began with the preliminary GDP of the Eurozone which has increased both on a quarterly basis and on annual basis however disappointing expectations. Compared to the 3rd quarter of 2016, Eurozone’s GDP increased by 0,4%, while analysts had expected an increase of 0,5%. On an annual basis, the GDP increased by 1,7%. Analysts had expected a variation of 1,8%.

Even in the case of the Eurozone trade balance analysts’ expectations have been totally disregarded. The trade surplus has jumped from 25,9 billion in the previous survey to 28,1 billion.

In the middle of the week arrived another unpleasant news from Greece.

Inflation in Greece in January had indicated a positive result of 1,2%. In the previous survey, however, the consumer price index had shown a figure at 0.0%. Greek inflation is not so high but the variation from the previous data is relevant.

Even the US inflation reports a record movement upward in January, according to the reports from the Bureau of Labor Statistics.

Consumer prices rose annually by 2,5%, versus +2,4% expected and the previous + 2,1%, well above the Fed’s target.

On a monthly basis, inflation rose by 0,6%, versus + 0,3% expected, while the core consumer price index marked a recovery of 0,3% versus + 0,2% expected by analysts.

The large rise in inflation put pressure on the Federal Reserve, the US central bank, forced to act as soon as possible on the interest rates in an attempt to not overheat the economy.

Later, the US labor department announced that the subsidy requests made last week rose by 5.000 units to a total of 239.000, against the result of the previous month to 234.000.

Analysts had forecast a rise of 11.000 requests for a weekly total of 245.000.

Also next week will be poor of significant market mover on economic calendar: the vicissitudes of international and monetary policy will dictate the market movements in the eighth week of 2017.

On Monday there will be the meeting of the Euro zone Finance Ministers to define the future of the bailout and the crisis in Greece, which continues to oppose to further austerity reforms demanded by its European creditors.

A worsening of the position of Greece within the eurozone could fuel uncertainty to the upcoming elections in the Netherlands, France and Germany and weigh down on the euro.

Another appointment widely expected in the week is the publication of the minutes of the last Federal Reserve meeting, the central bank of the United States. Contents may provide to the market more clues about the Fed’s intentions for the next rate hike and an increase at the next meeting in March is a possibility.

On the macro front we expect the update of the change in inflation in the Eurozone, the UK and German GDPs, and the performance of the manufacturing and service sectors of major economies published by Markit.

Leave a Comment

Your email address will not be published.

You may also like