The Fed is more hawkish than the ECB, especially at Trump

EUR / USD pair

The market environment was calm yesterday. In the eurozone, the indicator of business activity in the retail sector increased from 48.6 to 51.7 in May. In the US, the trade balance for April was better than the forecast of -46.2 billion dollars against -50.0 billion and exports recorded 211.25 billion dollars. This cannot be anything but inspire the White House to further trade with the EU. Labor costs in the final assessment for the first quarter were revised to increase from 2.7% to 2.9%. Stock index S&P 500 added 0.86%, but the euro once again showed growth on a new wave of reasoning about the completion of the QE program by the ECB by the end of this year. Yesterday, in the speech of Peter Praet and Jens Weidman confirmed the intentions of the regulator at the next meeting to discuss the plan for completing this stimulus. However, the base rate will not increase for a long time.

The ECB meeting will be next week on Thursday, and the Fed meeting on the day before. Therefore, taking into account the news from the ECB members, investors can calmly prepare to raise the rate of the Fed. And this factor may be stronger than economic data, while the corrective growth of the euro is 250 points, it will be convenient to close the purchases against the news. Today, Germany is expected to increase industrial orders for April by 0.7%. The indicator is good in itself but the March decline was -0.9%, although the annual growth is expected to be 3.6% against 3.1% earlier. In France, the trade balance for April is projected to improve from -5.3 billion euro to -5.1 billion. Retail sales in Italy are expected to grow by 0.2%, but there was a decrease of -0.2% in the previous month. The eurozone's GDP in the 2nd estimate for the 2nd quarter is expected to remain unchanged at 0.4%.

According to the US, the data today are secondary, but, according to expectations, it is unambiguously positive. Weekly applications for unemployment benefits are expected to be 223,000 against 221,000 earlier. The volume of consumer loans for April is projected at $ 13.9 billion compared to $ 11.6 billion in March, which will be the second month of growth in volumes. Tomorrow the G7 summit will open, where the trade wars will be discussed. We expect the euro to be torn in the range of 1.1720 / 65.

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