EUROPEAN SESSION
In the European session, the only highlight is the German IFO which is expected to tick higher to 86.0 vs 85.6. The IFO is generally correlated with the Composite PMI, so the expectations are skewed to the upside. The data won’t change anything for the ECB though, so the market reaction will likely be muted.
The markets are currently being driven by optimism as the US and Iran halted strikes over the weekend. Traders are obviously taking this as an early sign of potential de-escalation and that’s why we are seeing crude oil and the US dollar falling, while stocks, gold and bonds rally.
AMERICAN SESSION
In the American session, we get the US Durable Goods Orders data which is expected to show a 1.8% increase vs -4.5% contration last month. This is almost never a market moving release due to its volatile nature. The Fed is focused on inflation, so nobody’s going to care about durable goods data anyway.
The focus will remain on US-Iran headlines as traders will be on the lookout for further signals of de-escalation or a return to risk-off in case we go back to last week’s conditions.
This article was written by Giuseppe Dellamotta at investinglive.com.
