EUR & CHF Weekly Forecast – Eyes on Leading Indicators

Even though there are no major catalysts for the euro or franc this week, these mid-tier releases are worth keeping tabs on.

After all, leading indicators from the region’s top economies provide good clues on how the top-tier releases might turn out.

ECB head Lagarde’s speeches

Chairperson Lagarde is scheduled to speak at a virtual event hosted by the Institute for Law and Finance on Jan. 25, 8:45 am GMT
She is also due to participate in a virtual panel discussion titled “Restoring Economic Growth” at Davos 2021 at 4:15 pm GMT
Recall that her remarks during last week’s ECB presser were somewhat positive, so more optimism could keep the shared currency afloat

German IFO business climate index (Jan. 25, 9:00 am GMT) to dip from 92.1 to 91.5 this month
German GfK consumer climate index (Jan. 27, 7:00 am GMT) to fall from -7.3 to -7.8
German preliminary CPI (Jan. 28) to slide from 0.5% to 0.4% in January
French consumer spending (Jan. 29, 6:30 am GMT) to rebound by 20% after earlier 18.9% drop, flash GDP to show 4.1% contraction
German import prices (Jan. 29, 7:00 am GMT) to print 1.0% increase after earlier 0.5% uptick
Spanish flash CPI (Jan. 29, 8:00 am GMT) to show 0.6% decline, flash GDP to show 1.5% contraction

Index to dip from 104.3 to 102.0 in January to hint at slower economic activity over the next six months
Reading is based on a composite of 219 indicators, including , consumer confidence, exchange rate, money supply, interest rate spreads, stock market prices, and new orders

These lower-yielding European currencies tend to benefit from risk-off flows
Easing political uncertainty in the U.S. and in Italy could prove bullish for the euro
Traders seeking safe-haven flows but uneasy about buying the dollar ahead of the FOMC decision could prefer CHF or EUR instead