The euro is in for a busy day tomorrow. A host of key data points is scheduled for release during the day.

The most important ones are related to the largest economy in the eurozone. We had a bit of a positive surprise out of Germany lately, and we now get to see if that outlook holds.

The market has now digested all the major data for the first quarter, including somewhat lackluster corporate reports. So, getting May data should give us some insight into how the summer could perform. Let’s unpack this data-laden day, and see what could happen with the currency prices.

The Important Points

The day starts with the release of the final GDP number for the first quarter from Germany. This is a review of the data that was already provided. And it’s not likely to move the market unless there is a revision. Quarterly GDP change is supposed to stay at 0.4%, and annual at 0.6%.

We will then be getting some French data as well. However, the bits that are most likely to get market attention are the German Markit PMIs, and the Ifo Business climate survey that come out over the next couple of hours.

We can expect the EUR pairs to be quite turbulent during that period. To top it off, the day closes off with the release of the ECB monetary policy minutes, just to make sure everyone stays on their toes.

Market PMI Survey

Here we get a more intimate look into Germany’s industrial woes, the major drag on the country’s economy. Last month’s PMI hit lows not seen since 2012. And projections are for even worse this time around.

The worrying factor is that it’s the output and new orders that are continuing to contract. This indicates that German manufacturers are struggling to sell their products.

Expectations are for Manufacturing PMI to come in at 44.3, a decimal down from the 44.4 prior. This contrasts with the other PMI metrics, such as Services. We can expect this to improve to 56.2 from 55.7, helping the composite move up slightly to 52.4 from 52.2.

A further drop in Germany’s industrial outlook would be negative for the euro, naturally. But the market might be extra concerned if there is a drop in the services sector, which is keeping the economy afloat for the moment.

Ifo Business Climate

The next major data out of Germany that could provide some volatility is the Ifo Business Climate Survey. We can expect this to stay in contraction territory at 99.3, a marginal improvement from the 99.2 prior.

This indicator has been dragged down by the expectations component, which is finally expected to pick up a bit to 95.4 from 95.2 prior. However, that’s not enough to make a significant difference.

A large portion of this indicator is affected by the trade outlook. And it has taken a nosedive over the trade war. Since we’ve been getting bad news on that front as of the beginning of the month, there isn’t much hope for an improvement in the business outlook.

Look for the current situation to slip below 100, which might be interpreted as a significant negative sign by the markets. On the other hand, if the climate survey to were to return to growth, that would give some strength to the euro.

It’s Industry

Traders are in a holding pattern around the euro as its largest component economy struggles to find growth in industry and exports. With the trade outlook remaining dim at least in the short term, it’s not surprising that the market would price in a negative read from these numbers.

A beat of expectations, therefore, could give the market a strong bump. Otherwise, continuing bad news from the German manufacturing sector would keep economic and inflationary expectations for the eurozone muted.