1Finance

EUR/USD failed to hold onto higher ground in a mixed week. The ECB meeting is clearly the big event of the upcoming week, but not the only topics on the agenda. Here is an outlook for the highlights of this week.

1. German ZEW Economic Sentiment: Tuesday, 10:00. A score of 17.9 points is on the cards now. The all euro-zone figures stood at 30.9 points and 30.2 is forecast now.
2. Mario Draghi talks: Tuesday, 19:00. The president of the European Central Bank will speak at an event in Frankfurt less than 48 hours ahead of ECB meeting. He could drop a hint about the tone, but in such proximity to the event, it is more likely that Draghi will be more cautious.
3. German CPI (final): Wednesday, 7:00. The German figure will likely be confirmed now.
4. German WPI: Wednesday, 7:00. Back in October, prices remained flat.
5. Employment Change: Wednesday, 10:00. Another gain of 0.4% is forecast now.
6. Industrial Production: Wednesday, 10:00. A drop of 0.2% is projected.
7. French CPI (final): Thursday, 7:45. This number will probably confirmed now. It all feeds into the all euro-zone number.
8. Flash PMIs: Thursday morning: 8:00 for France, 8:30 for Germany and 9:00 for the whole euro-zone.
9. Rate decision: Thursday, 12:45, press conference at 13:30. The big news was out already at the October meeting. The ECB will halve the volume of its bond-buys in January to 30 billion euros per month and the program will run through September 2018. Draghi left the door open to what happens afterward, andthat was a dovish sign that sent the euro down. Since then, weak inflation reads, especially with core CPI slipping to 0.9%, vindicated his dovishness. This time, no changes are expected, but the ECB will publish new staff forecasts for inflation and growth. A downgrade of inflation forecasts could serve to weaken the euro and Draghi could join in. However, it is hard to ignore the robust growth, especially in Germany(0.8% q/q). As usual, Draghi will continue his balancing act. If he talks about ending QE after September, the euro will jump, but this is unlikely. The ECB can wait until around June to make such future announcements.
10. Trade Balance: Friday, 10:00. The figure for October will likely be similar: 24.6 billion.

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