Week Ahead – Economic Indicators (Europe)

Hey, Traders!
For the February 2nd week, here is a list of all of the major economic indicators being released during the EU Session, with a brief synopsis of what they represent and what to possibly expect from the markets in reaction.

Monday
French, German, UK and Eurozone Manufacturing PMI’s
The Manufacturing Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
What to expect:
A reading above 50 signals rising activity versus the previous month and the closer to zero the faster is activity contracting. The data are compiled by the Chartered Institute of Purchasing and Supply and Markit.
A higher than expected reading should be taken as bullish for the GBP/EUR, while a lower than expected reading should be taken as bearish for the GBP/EUR.

Tuesday
French CPI
The consumer price index (CPI) is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly and annual changes in the CPI represent the main rates of inflation. The national CPI is released alongside the HICP, Eurostat’s harmonized measure of consumer prices. A flash estimate was released for the first time in January 2016 and is now published towards the end of each reference month.
What to expect:
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

Wednesday
French, German, UK and Eurozone PMI’s
Services
The Services Purchasing Managers’ Index (PMI) provides an estimate of service sector business activity for the preceding month by using information obtained from a representative sector survey incorporating transport and communication, financial intermediation, business services, personal services, computing and IT and hotels and restaurants. Results are compiled into a single index which can range between zero and 100.
Composite
The Composite PMI Index measures the activity level of purchasing managers in both sectors (manufacturing and services).
What to expect:
A reading above 50 signals rising activity versus the previous month and the closer to zero the faster is activity contracting. The data are compiled by the Chartered Institute of Purchasing and Supply and Markit.
A higher than expected reading should be taken as bullish for the GBP/EUR, while a lower than expected reading should be taken as bearish for the GBP/EUR.

Eurozone CPI
The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by the vast majority of households.
What to expect:
Over the long run, the bond market will rally when increases in the CPI are small. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits. A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.

Thursday
BoE Interest Rate
Check out our prep document.

ECB Interest Rate
Check out our prep document.

Friday
German Industrial Production
German industrial production measures the total output of factories, mines, and utilities in Germany. It shows how much goods and materials Germany’s industrial sector is producing and is an important indicator of the country’s economic health.
What to Expect
If German industrial production comes in above the forecast, it signals stronger economic activity and is likely positive for the euro and European markets; if it falls short, it may raise concerns about growth and weigh on sentiment.