Ain`t no sunshine when the eurozone economy is gone
Mis à jour
First things first: Do you think one has to work for one or two circuses before he can start as a member of the ECB?
Anyway as surprised as the ECB may be about the total weakness of the euro economy (no one could have foreseen it!) as surprised they will probably be today when the GDP of the eurozone will disappoint the consensus forecast as well as the ECB forecasts.
-> EUR GDP will be weaker (0.1 or 0.2) than consensus (0.3) expects it.
The German industrial production today will also be weaker than consensus forecasts expects it.
Some other total surprising data no one could have expected:
The EUR PMIs were horrible this week
-> after the manufacturing sector the service sector is now also in contracting territory (unbelievable right?)
The German Factory orders yesterday were horrible x10 (as I forecasted) and much weaker than the consensus expected them. (surprised pikachu face)
Inflation will fall of a cliff from october onwards as the weakness from the economy will spill over to the consumer (retail sales already signalling it)
For a broader forecast look at my EURCAD trade, where I went into more detail about the EUR weakness.
If someone knows some good news from the eurozone I`m all ears but so far theres no sunshine when she (the economy) is gone.
Anyway as surprised as the ECB may be about the total weakness of the euro economy (no one could have foreseen it!) as surprised they will probably be today when the GDP of the eurozone will disappoint the consensus forecast as well as the ECB forecasts.
-> EUR GDP will be weaker (0.1 or 0.2) than consensus (0.3) expects it.
The German industrial production today will also be weaker than consensus forecasts expects it.
Some other total surprising data no one could have expected:
The EUR PMIs were horrible this week
-> after the manufacturing sector the service sector is now also in contracting territory (unbelievable right?)
The German Factory orders yesterday were horrible x10 (as I forecasted) and much weaker than the consensus expected them. (surprised pikachu face)
Inflation will fall of a cliff from october onwards as the weakness from the economy will spill over to the consumer (retail sales already signalling it)
For a broader forecast look at my EURCAD trade, where I went into more detail about the EUR weakness.
If someone knows some good news from the eurozone I`m all ears but so far theres no sunshine when she (the economy) is gone.
Note
As announced, the EUR GDP data (0.1) and the industrial production from Germany were worse than expected by the consensus. -> And the euro continues its downward slide. Easy Peasy.
Note
The eurozone industrial production today was weak (as I forecasted) but tomorrow will be the big day: will the ECB hike the OCR and put the eurozone economy a step further to the abyss?The chances are 50/50 and it will be one interesting rate decision thats for sure!
Note
The German Inflation today will come lower (3.7 or 3.8) than the consensus forecasts (4.0)-> Great for my EUR Short
Note
Business as usual:The German Inflation data comes at 3.8 -> lower than the consensus expected it!
Note
The Eurozone inflation data today should be weaker than consensus (3.1) expects it.Note
The Eurozone inflation data comes as I forecasted weaker (2.9) than consensus expected it.Note
The scenario I predicted in July is playing out:-> Quote: "Inflation in the eurozone will already be around 3% towards the end of 2023."
And here we are, in November 23 with 2.9% inflation in the eurozone.
Where do we go from here?
Well, inflation will rise again slightly in December due to base effects.
Moreover, it will fall again from February onwards and will already be below the 3% mark again in Q1 24.
A scenario that even the most optimistic ECB members do not expect until August 24.
-> The ECB will cut interest rates far earlier than it currently realises.
(My base scenario for the first ECB rate cut is March / April 2024)
Note
📊🇪🇺Industrial Production Data out of the Eurozone will come weaker than the consensus expects it.-> Good for my EUR Shorts
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As forecasted the 📊🇪🇺Industrial Production Data out of the Eurozone comes weaker than the consensus expected it.-> easy :)
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Today we have the EUR PMIs. If they're as horrible as the last ones we will see the EUR tank really fast.-> A quick run into my EURAUD Short take profit would be a nice christmas present for me!:)
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📊🇩🇪The German Inflation data will be weaker today than the consensus expects it.-> wonderful for my EUR Short!:)
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📊🇩🇪As forecasted the German Inflation data was much weaker (3.2) yesterday than the consensus (3.5) expected it.Easy game✅️
And my EUR Shorts just keep printing, I love it!😉
Note
📊🇪🇺The Eurozone CPI today will of course also come in weaker than the consensus expects it.-> Watch the magic! 😉
🔮As I already forecasted in July (!)
("In december we will have a CPI in the eurozone at around 3%")🔮
✅️And here we are, at the start of december, with a sub 3% reading today✅️
Note
📊🇪🇺As forecasted Inflation data from the EU came in lower than consensus expectations✅️🔮 We are now as predicted in July
(Quote: "and reach the 2% target in the first half of 2020 at the latest.")
closer to the 2% target than the market and the ECB in particular dared to dream a few months ago 🤫
📉The 🇪🇺EUR shorts are performing well and I expect a push of at least another 200 pips downwards in the EUR pairs (for now)✅️
Lets see!
Note
🏛🇪🇺The ECB decision next week will decide about the nearterm future of the EUR.One thing is for sure:
They will have to cut their growth & inflation forecasts a lot
-> thats a negative for the EUR longterm📉
Note
🏛🇪🇺 This week we have the ECB meeting and, as mentioned, it will revise its growth and inflation forecasts massively downwards!-> In addition, we have many, many other hugely important data points coming up (FED, CPI, etc.) that will really shake up the market.
🟢If the EURNZD is driven up several hundred pips as a result, I would hit it from above.
Note
🟢The correction took place up to the 1.79 region and it was once again an excellent option to short the EURNZD!This fell almost 500 pips lower in the meantime, easy✅️
-> Always read my comments where I recommended to short it again✅️
Note
📊🔮 The next focus will be on the EUR inflation data this week. It will show a rise in inflation and lift it back towards the 3% mark.-> This could put the ECB in the wrong boat, as this boost will only be temporary due to base effects and a one-off effect from the German energy price brake.
The February and March inflation data at the latest will clearly show the misconception of the ECB about higher inflation in the long term ✅️
Note
📊🇪🇺Also PPI Data out of the Eurozone will come weaker today than the consensus expects it.-> Great for my EUR Shorts!✅️
Note
📊🇪🇺As forecasted the PPI Data out of the Eurozone was weaker than the consensus expected it.-> easy✅️
📊🇪🇺The February CPI out of the Eurozone will be the most exciting EUR data since a long time, since it will determine when we will get the first ECB rate cut
-> My base case is still April✅️
Note
📊🇦🇺The business confidence out of New Zealand jumped materially higher this week.-> Thats good news longterm for the NZD🟢
📊🇦🇺Next week we get the CPI data out of New Zealand. Together with the Employment data early next month it will determine how hawkish the RBNZ can be in its February Rate Decision. The question of course will be more about when we will get the first cut more than if more hikes could follow...
-> Unless the CPI report really surprises upwards (like 5.0% or higher) , then the discussion about a further hike would get heated again..
Note
📊🇦🇺 The inflation data from New Zealand came out more or less as expected, the labour market data today will be more exciting.But with the strong employment report out of New Zealand yesterday I still like the EURNZD as one of my favourite shorts🟢
Note
This week we are facing the📊🇪🇺PMI (purchasing managers' index) from the eurozone
📊🇦🇺GDP from New Zealand, two extremely important data points for the EURNZD.
Meanwhile, the pair is getting closer and closer to an extremely attractive short zone.
-> I will wait for this week's events to pass before possibly building a further short position in the EURNZD🟢
Note
🔮My crystal ball tells me:📊🇪🇺The EUR Inflation data (CPI) will come weaker today than the consensus expects it.
-> This will weigh on the euro in the long term🟢
Note
🔮 As predicted, the 📊🇪🇺EUR inflation data was lower than expected by consensus.-> The EUR subsequently saw weakness
-> EURNZD is (slowly) heading south again🟢
-> All conditions (for the ECB) to cut interest rates are met ✅️
🏛🇪🇺 Nevertheless, I expect the ECB (out of sheer stubbornness) to wait until June for the first rate cut.
-> If Lagarde hints at interest rate cuts for June AND July today, the beatings for the EUR will continue until morale improves💥💥💥
Note
🟢The trade was triggered and is in profit with +900 pips
-> Picture book entry + movement, I love it!✅️
📊🔮My crystal ball tells me:
EUR CPI (inflation data) today will be lower than consensus expected.
-> This is excellent for my EURNZD short🟢
🔮 As predicted a year ago, 📊🇪🇺EUR inflation will already hit the ECB's inflation target of 2% today (contrary to the ECB's completely abstruse forecasts)
🔮My forecast:🔮
The ECB will cut interest rates again in September✅️
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