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The June ZEW economic sentiment index for Germany and the Eurozone will be released in ten minutes.European Investment Bank President: Will not run for the position of President of the European Central Bank.The president of the European Investment Bank stated that the EU is discussing measures to give the European Investment Bank an important role in Ukraines post-war reconstruction.The president of the European Investment Bank said a huge deal will be signed later this month with a major European defense company.On June 16th, it was reported that Kevin Warsh, who served as a Federal Reserve Governor from 2006 to 2011, was known for his hawkish stance. However, as a nominee for Fed Chair, he advocated for lower borrowing costs and predicted that AI-driven productivity gains and the Feds balance sheet reduction could be forces to curb inflation. Darius Dale, founder and CEO of 42 Macro, stated, "I dont think anyone really knows what Kevin Warshs true reaction function is right now. Another unknown is how much his FOMC colleagues will accept his vision. During his Senate confirmation hearings, Warsh stated that the Fed failed to deliver on its promises. Warsh has been publicly criticizing the Fed for years with such vehement language that I think it will pose considerable difficulties for him in leading the institution." Furthermore, Dale emphasized Warshs two important mentors—Stanley Druckenmiller and the late Milton Friedman. Warsh studied under two of the worlds most outstanding economists, whose views on how the economy works differ significantly from those of current FOMC members. Some of the topics he will discuss are ones we may never have heard from Federal Reserve officials in decades.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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