According to data released today, volume of industrial orders in Germany in May has not changed on the monthly basis and fell by 0.2% on the annual basis. In April, orders in the manufacturing sector of Germany also fell by 1.9% against the value in March. Judging by the presented data, German industry faces difficulties and stagnation may continue.
Yesterday’s European data was mixed. Retail sales in the Eurozone remained almost at the previous level in May, which is close to zero ( 0.4% vs. 0.0% in April).
Despite weak US data, showing that the level of industrial orders in USA in May was -1.0% against the forecast of 0.9% and 1.8% in April, the pair EUR/USD fell by 80 points yesterday. Today, ECB meeting will be held, where the issues related to Brexit will be discussed. Representative of ECB, Villeroy de Halo said that the consequences of Brexit would be the most severe for the UK. Although Brexit would also affect the economy of Eurozone, and there is no reason for pessimism about Brexit. According to Halo, ECB is prepared to cope with the consequences of the Brexit.
At the same time, investors’ concern about the state of the world and European economies persists, which is evidenced by the rise in the USD, especially against the European currencies, and increasing demand for the yen and gold. The price of gold has now reached the new 2-year highs at the level of $1370.00 per ounce.
Today, US macro-economic data will be released in the period from 14:30 to 16:00 (GMT 2) as follows: US trade balance for May, Markit business activity index (PMI) and ISM business activity index in the service sector (PMI) for June. The rise in these indices will support the USD.
At 20:00 minutes of the FOMC meeting will be released. Market participants expect that it will indicate prospects for the rise in the interest rates in the USA.
Yesterday, New York Fed President William Dudley said that the prospects for monetary policy of the US remain uncertain.
On Friday at 14:30 (GMT 2), US labor market data will be released. In case of the negative data, chances of the interest rate hike in the USA will be low.