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On May 5, analysts at the financial website Forexlive said: This week will be a week with light economic events, which is usually the case after the release of the US non-farm payroll change data. On Monday, the US will release the ISM service industry PMI and on Tuesday the trade account, which usually do not attract much attention, but given the current tensions related to tariffs, it is worth paying attention to.Germanys DAX30 index opened up 55.66 points, or 0.24%, at 23,113.00 points on May 5 (Monday); Frances CAC40 index opened down 28.63 points, or 0.37%, at 7,741.85 points on May 5 (Monday); Europes STOXX 50 index opened down 16.84 points, or 0.32%, at 5,268.3 points on May 5 (Monday); Spains IBEX35 index opened up 65.30 points, or 0.49%, at 13,487.00 points on May 5 (Monday); Italys FTSE MIB index opened down 151.94 points, or 0.4%, at 38,176.00 points on May 5 (Monday).Rwandan Foreign Minister: Rwandas negotiations with the United States on accepting immigrants deported by the United States are in the "early stages".UBS Group: Global oil demand is expected to see further seasonal growth in the coming months as the US driving season arrives and temperatures rise in the United States and the Middle East.May 5th news, on May 5th, the report released by CRIC Real Estate Research Center showed that the property market stopped falling and stabilized in the first quarter of 2025. Comparing the total transaction volume of new and second-hand houses in 30 typical cities in the first quarter of previous years, it can be seen that the first quarter of 2025 is basically at the median level in the past six years. In the first quarter of 2025, the transaction area of first-hand and second-hand houses reached 82.04 million square meters, a year-on-year increase of 17%. At the new home level, thanks to the continued fermentation of the favorable new policies in the core first-tier cities, the transaction area of commercial housing in 115 key cities in the first quarter was 51.31 million square meters, the same as last year. From the monthly trend, since February 2024, the year-on-year decline in new home transactions has continued to narrow. By March 2025, the monthly new home transaction volume was the same as in 2024, and the signs of stopping the decline and stabilizing have begun to appear.

EUR/USD falls to 1.0850 as German/US Data escalates the ECB-Fed Conflict

Alina Haynes

Feb 01, 2023 15:32

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Mid-1.0800s intraday support is reestablished for EUR/USD on Wednesday morning, reversing Tuesday's rebound gains. This demonstrates the market's uneasiness ahead of the Federal Open Market Committee (FOMC) meeting. German economic risks to the EU, as well as mixed data from the United States and fears that Fed Chairman Jerome Powell will yet support hawks, might potentially weigh on the currency.

 

The Eurozone's Gross Domestic Product (GDP) for the fourth quarter (Q4) climbed 0.1% quarter-over-quarter (QoQ) on Tuesday, compared to 0.0% expected and 0.3% earlier. The year-over-year statistics were also good for the bloc, topping the market consensus of 1.8% to achieve 1.9%, compared to 2.3% previously. Nevertheless, German Retail Sales decreased 5.3% month-over-month in December, which was substantially worse than expected. Earlier in the week, the German GDP likewise disappointed EUR/USD pair speculators.

 

In contrast, the US Employment Cost Index (ECI) for the fourth quarter declined to 1.0% compared to market estimates of 1.1% and previous readings of 1.2%. In addition, the Conference Board (CB) Consumer Confidence index dropped from 108.3 to 107.10 in January. The US Chicago Purchasing Managers' Index (PMI) for January, which rose to 44.3 vs 41 expected and 44.9 previous readings, does not merit substantial attention.

 

Aside from the United States, higher profit reports from industry leaders including General Motors, Exxon, and McDonald's alleviated the economic downturn and lifted Wall Street indices. Nevertheless, the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq all reported daily gains of greater than 1.0% on the previous trading day. In contrast, the yields on 10-year US Treasury notes reversed a three-day rise and returned to 3.51 percent, while their two-year equivalents plummeted to 4.20 percent.

 

It should be noted that JP Morgan's annual survey uncovered a reduction in inflation fears and a rise in recession fears, which tests the risk profile in the middle of pre-Fed anxiety. In spite of this, the world's largest rating agency, Fitch, forecasts that the US Consumer Price Index (CPI) would moderate to the mid-3.0% band in 2023 and the high-2.0% range in 2024, putting pressure on EUR/USD bears.

 

As a result of these variables, S&P 500 Futures see minor losses, while US Treasury bond rates remain sluggish and halt their slide from the previous day. This allows the EUR/USD pair to prepare for the Federal Reserve's dovish rate hike of 0.25 percentage points.

 

While the 0.25 basis point Fed rate hike is virtually expected and has been priced in, EUR/USD traders will also pay close attention to January activity data and Jerome Powell's ability to defend aggressive rate hikes.


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