Week in FX Europe – It Does Not Get any Easier For EUR Next Week

Enjoy this weekend and get some rest, as next week is a new month littered with central bank rate announcements, ending with the 'granddaddy' of economic indicators, the US non-farm payroll report. If none of the above releases 'tickle your fancy' investors will still have a lot of rhetoric to chew on before deciding on what asset class they wish to covet in the short term.

Draghi and company are expected to keep key interest rates on hold after the -25bp cut in May. The market risk however is that policy makers may be forced to ease monetary policy further, as early as July, if the Euro-region fails to improve or if benign inflation remains too low for too long. Analyst seem to agree if that is the situation, then another -25bp cut in the refi rate would be the most likely approach.

Other data on show will be the second and final reading of the composite purchasing managers index – the release is expected to be unrevised from the preliminary release –...