Monday’s trading session is unfolding in a fairly calm atmosphere, which feels unusual after the high volatility we’ve seen in recent weeks. However, it cannot be ruled out that this is merely the calm before the storm. This week will bring a wave of crucial macroeconomic data, and it’s hard to believe the U.S. president will refrain from shaking up the markets for long.
A Calendar Full of Market Triggers
Monday’s macroeconomic calendar is almost empty, as if it’s gathering strength for what’s ahead. Over the next few days, we expect a slew of data releases, many of which have the potential to generate serious market movements.
Tomorrow, we will get a first look at Spain’s preliminary April inflation figures and its GDP growth for the first quarter. Later, sentiment surveys from the eurozone will be published, and forecasts suggest a slight deterioration compared to previous readings. Next will come the decision of Hungary’s central bank, although interest rates are expected to remain unchanged. Tuesday will also bring the first set of data from the U.S. labor market — starting, as usual, with the JOLTS job openings report.
In the early hours of Wednesday, we’ll see China’s leading indicators, with the key question being whether the industrial PMI will reveal cracks caused by the ongoing trade war. After that, attention will shift to Europe, where we’ll receive both inflation and GDP data from the bloc’s three largest economies. Germany will also report on retail sales and unemployment.
At 10:00 a.m. Polish time, Poland’s inflation dynamics for the past month will be published. Year-on-year CPI is expected to drop to 4.3%. In the afternoon, the U.S. will release GDP growth figures, consumer spending data, and another labor market report (ADP payrolls).
Thursday will be a public holiday in many countries, but the Bank of Japan will conclude its policy meeting (interest rates are expected to remain at 0.5%). Meanwhile, U.S. leading indicators will be released, and once again, uncertainty surrounds the potential impact of the new tariff policies.
Finally, on Friday — when many people will still be enjoying the long holiday — the calendar includes industrial PMI data from Europe, eurozone inflation figures, and in the afternoon, the U.S. Department of Labor’s employment data.
Despite the holiday mood in many households, it’s clear that markets could generate plenty of excitement this week.
Calm Before the Storm?
Beyond macroeconomic data, political developments could also provide significant impulses. Parliamentary elections are taking place today in Canada and on Saturday in Australia. The U.S. continues to push for a ceasefire between Russia and Ukraine, but the aggressor’s attitude still seems more like posturing than a genuine desire to end the conflict.
Meanwhile, the trade war has entered an increasingly strange phase. The Americans claim they are negotiating with China, but Chinese officials have not confirmed this. Reports from China (regarding support for firms most affected by the conflict) suggest that the Chinese authorities are prepared for a prolonged tug-of-war.
None of these issues seem to have had a strong impact on Monday’s session, which appears to be a transitional phase in anticipation of new triggers. The EUR/USD exchange rate continues to consolidate around $1.135. This is contributing to a stabilization of Polish currency pairs. The sideways trend is becoming increasingly entrenched for EUR/PLN, with the euro trading below 4.28 PLN. USD/PLN remains close to 3.76 PLN, and CHF/PLN is hovering near 4.54 PLN.
Author: Adam Fuchs, Currency Analyst at Walutomat.pl
Source: CEO.com.pl – Stable Currencies but Rising Tensions: A Week Full of Data and Events
