Eurusd Elwave count

1. German WPI: Monday, 6:00. German inflation numbers have influence on the ECB, especially concerning interest rates. After a big drop of 1.1% in wholesale prices, a small rise is expected now: 0.4%.
2. French GDP (first release): Tuesday, 5:30. The euro-zone’s second largest economy surprised by growing in the fourth quarter of 2011, and remained flat in Q1 2012. PMIs and other indicators point to contraction in Q2. The consensus stands on -0.2%. Note that the final number usually confirms the first release, also in Germany’s case. Italy’s economy fell sharply, and also Spain contracted.
3. German GDP (first release): Tuesday, 6:00. Germany’s strong 0.5% growth in Q1 saved the euro-zone from entering an official recession – it remained flat. However, the situation deteriorated in Q2, and growth is expected to fall to only 0.1%. A drop in Germany’s output will not be very surprising in the current environment.
4. French Quarterly Non-Farm Payrolls: Tuesday, 6:45. The number of payrolls is published in France only once per quarter, making this figure more important. Q1 saw a surprising rise of 0.1% in jobs, after a 0.2% drop beforehand. Another drop of 0.1% is likely now.
5. GDP (first release): Tuesday, 9:00. The initial GDP release for the euro-zone in Q2 is slightly overshadowed by the ZEW figure and the earlier releases of French, German, Italian and Spanish figures. Nevertheless, this figure is of high importance and will echo for quite some time. All the signs point to a contraction in Q2 after a flat Q1 and a squeeze of 0.3% beforehand. Contraction of 0.2% is likely now. Note that the estimates are likely to change once Germany and France release their figures.
6. German ZEW Economic Sentiment: Tuesday, 9:00. This survey of 350 analysts and investors has a significant impact on the euro, and it certainly reflected the deteriorating in sentiment, falling in the past three months. The indicator reached -19.6 points last month, disappointing once again, and showing the growing pessimism in the German business community. A very small recovery is forecast for the month of July. The all-European figure, which is less important, is likely to tick up from the -22.3 points recorded last month.
7. Industrial Production: Tuesday, 9:00. Industrial output surprised with by rising 0.6% in May. The tables have likely turned in June, as already seen in the German and French figures. A drop of 0.1% is expected now.
8. CPI: Thursday, 9:00. The annual level of inflation is moving very slowly towards the 2% target. The initial figure of 2.4% will likely be confirmed in the final call now, or revised to 2.5%. Core CPI will likely stand on 1.6%.
9. German PPI: Friday, 6:00. Producer prices fell short of expectations for three months in a row, and prices fell in the past two months. July will likely see a correction with a rise of 0.4%.
10. Current Account: Friday, 8:00. While this is a relatively late figure, its wide scope (encompassing trade balance, services, flows, etc.) makes it of high important. The euro-zone enjoyed three consecutive months of surpluses, with a strong 10.9 billion euro surplus for May. June will probably see a lower figure of 7.8 billion.
11. Trade Balance: Friday, 9:00. Also the his more narrow figure is positive, thanks to German exports. The surplus rose from 4.5 to 6.3 billion, and likely dropped now to 5.4 billion.

written by Yohay Elam |