EUR/USD has ticked lower in the Wednesday session. Currently, the pair is trading at 1.1151, down 0.08% on the day. In economic news, French GDP and consumer inflation were within expectations. German unemployment rolls swelled by 60 thousand, much higher than the estimate of -8 thousand. The ECB released its financial stability report, which is published twice a year. In the U.S., the sole event is the Richmond Manufacturing Index, which is projected to climb to 6 points. On Thursday, the U.S. releases GDP and umemployment claims.
The German economy has been showing signs of weakness, but the labor market has remained a bright spot. However, unemployment rolls balooned by 60 thousand in April, surprising the markets. The indicator has recorded consecutive declines for almost two years, and investors are hoping that the April spike was a one-time blip. If upcoming German employment numbers follow suit and miss expectations, the euro could lose ground.
As the locomotive of the eurozone economy, German indicators are a bellwether for the rest of the eurozone. Consumer confidence took a hit in May, as GfK Consumer Climate slipped to 10.1 points, down from 10.4 in April. This was the lowest score since April 2017. With the escalation in U.S-China trade tensions, there is no end in sight to the tariffs which have been imposed on European goods, which has dampened consumer confidence. We’ll get a look at the health of consumer spending on Thursday, when Germany releases retail sales. After a decline of 0.2% in April, the markets are expecting a rebound in May, with a forecast of 0.4%.
