EUR/USD Forecast Jan. 4-8 2021 – Euro Ends Year With Winning Week

  1. Manufacturing PMIs: Monday, 8:15 in France, 8:30 in Germany, and 9:00 for the whole eurozone. The German and eurozone manufacturing sectors remain well into expansionary territory, and the upcoming PMIs are expected to confirm the initial estimates of 58.6 and 55.5, respectively. The PMIs for Spain, Italy and France are also above the 50-line, which points to expansion. 
  2. German Retail Sales: Tuesday, 7:00. Retail sales rebounded in October with a gain of 2.6%, but analysts are braced for a sharp downturn in November, with an estimate of -2.0%.
  3. French CPI: Tuesday, 7:45. Inflation came in at 0.2% in November, ending a nasty streak of three straight declines. The upturn is extended to continue in December, with a forecast of 0.4%.
  4. Monetary Data: Tuesday, 9:00. M3 Money Supply accelerated to an annual growth rate of 10.5% in October, up from 10.4% beforehand. The estimate for November stands at 10.5%. Private Loans is projected to rise from 3.1% – 3.3%.
  5. German Prelim CPI: Wednesday, All Day. Inflation in the largest economy in the bloc slumped to -0.8% in November, its lowest level in12 months. The index is expected to bounce back in December, with an estimate of 0.6%.
  6. Service PMIs: Wednesday, 8:15 in France, 8:30 in Germany, and 9:00 for the whole eurozone. Services remain in contraction, with readings below the 50-level. The second-estimate PMIs for Germany and the eurozone are expected to confirm the initial readings, at 47.7 and 47.4, respectively. After a soft release of 38.8, France is projected to improve to 49.2 points.
  7. German Factory Orders: Thursday, 7:00. Factory orders jumped to 2.9% in October, well above expectations. However, analysts are braced for a downturn in November, with a forecast of -1.2%.
  8. Inflation Report: Thursday, 10:00. Headline CPI continues to flounder and has posted five straight declines. No relief is forecast for December, with an estimate of -0.2%. Core CPI is expected to remain at 0.2% for a third successive month.
  9. Retail Sales: Thursday, 10:00. Retail sales is the primary gauge of consumer spending. The October release came in at 1.5%, but November is expected reverse directions, with an estimate of -3.4%.
  10. ECB Monetary Policy Meeting Accounts: Thursday, 12:30. The ECB will release the minutes of its November policy meeting. With inflation at very low levels, investors will be looking for any hints as to whether the ECB plans additional easing early next year.
  11. German Industrial Production: Friday, 7:00. This manufacturing indicator jumped to 3.2% in October, marking a 4-month high. The forecast for November stands at 0.7%.
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