Economic indicators in the euro area are deteriorating


The G-7 summit ended on the weekend, but its results disappointed all the participants. The anticipated trade war did not receive any decision because the main participant, Donald Trump leave before the final communique was signed. But the summit participants once again called on Russia not to violate the democratic processes in Syria and Ukraine. This opens the gate to the dollar even more. Even there were rumors that the ECB will not announce the exact deadlines for completing the QE program this week, and rather prefer to take into account "additional data". As expected, economic data for the euro area went worse than forecast. Germany's trade balance in April fell from 22.0 billion euros to 19.4 billion, versus the forecast of 20.3 billion euros. German industrial production fell 1.0% against expectations of growth of 0.4%. While industrial production in France for May fell by 0.5% against expectations of growth, also by 0.4%. The euro fell by 32 points.

Today, industrial production of Italy will be released and the April forecast is no longer optimistic at -0.7%. In the United States, a new cycle of attracting external debt begins. Medium- and long-term bonds are placed this week for a total of $ 68 billion, plus short-term 3-month and 6-month promissory notes of $ 90 billion. According to the recent data on June 7, the external debt of the United States will reach 21.059 trillion dollars. In the face of political tension, demand for US bonds will increase which also increases the demand for dollars.

On Tuesday, the US CPI is expected to grow by 0.2%, and on Wednesday the Fed's decision on the rate is awaited. We are expecting for the decline of the euro to 1.1620.


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