EUR: Expect volatility around data releases - Westpac

Tim Riddell, Research Analyst at Westpac suggests that illiquidity could see EUR volatility around data releases.

Key Quotes

“Surveys have mostly remained at or near multi-year highs and so the coming hard data for Germany will be monitored closely for moderation. However, any moderation is unlikely to appear until more 3Q data are released. Markets are geared for ECB guidance on tapering into next year, so sharp pullbacks in inflation indicators or activity data would be needed to avoid this at least being outlined in Sep/Oct ECB meetings.”

“Recent CHF softening continues despite lifts in CPI and PMI as its safe haven status subsides with better EU data.”

“Despite extreme positions, outperforming EU data suggests further moves higher EUR/USD as USD weakness persists.”