Expectations for the upcoming week

After it became known about the formation of a coalition in Germany, fears for the euro area have declined markedly. At the same time, the possibility of a suspended parliament in Italy is a negative factor for the euro, although not so critical. At the same time investors’ attention on the euro is gradually shifting to the ECB meeting, the results of which will be published on Thursday. Some action against the background of the existing situation in the euro area is expected.

During the week (Economic Calendar) there are meetings of the Bank of Canada on Wednesday and the Bank of Japan on Friday. Regarding these meetings, there are no significant expectations for the market. But it is worth noting the meeting of the Central Bank of Japan, which may express concern about the overbought of the yen, thereby conducting a verbal intervention, which confirms the low-key dynamics of the yen earlier in the week.

The market continues to monitor the possibilities of unfolding the US trade war, due to the introduction of new duties on steel and aluminum. This decision continues to put pressure on commodity currencies and the US dollar in particular. The market expects response from US partners, which is reflected in the growth of safe haven assets.

Hanzenko Anton