Euro Gains on Stronger CPI, Swiss Franc Weakens Ahead of US Jobs Data

Hello traders, and welcome to Friday. As we head into the last trading day of the week, it’s important to recap Thursday’s major events and prepare for what’s ahead today. Thursday was a significant day, marked by busy macroeconomic releases and earnings results that had notable impacts across markets.

Thursday began with mixed results in the European economic data. The Eurozone’s CPI flash estimate came in higher than anticipated, reinforcing the euro’s strength throughout the day. German and Spanish inflation data on Wednesday also surpassed expectations, adding to the positive momentum for the euro and hinting at persistent inflationary pressures in the region. In contrast, Australia reported weaker-than-expected retail sales at 0.1%, following a week of disappointing domestic data that has kept the Australian dollar under pressure.

The Bank of Japan maintained its current interest rate policy, as expected, keeping rates unchanged. This decision had a limited immediate impact on the yen but continued to show the central bank’s reluctance to shift from its ultra-loose monetary policy stance. Meanwhile, in the US, the ADP non-farm employment change report came in more than twice the expected figure, at 233,000. This surprising strength in the US job market initially supported the dollar but was counterbalanced by lower-than-expected US GDP growth at 2.8% instead of the anticipated 3%.

On the corporate front, Thursday’s earnings lineup featured some of the biggest names in the market. Apple and Amazon released their quarterly reports after the market close, with Amazon seeing a positive response, trading up 5% in after-hours trading, while Apple showed a slight decline of about 1% despite strong earnings. Mastercard, Merck, Shell, and Uber were among the other big companies that released earnings during the day, each bringing varying levels of market response.

As we move into Friday, the focus shifts to several key macroeconomic reports and the market’s reaction to earnings. The morning has already brought us inflation data from Switzerland, which came in lower than expected, pressuring the Swiss franc. Later in the day, the spotlight will be on the US non-farm payrolls report, expected at 106,000. This report is particularly important as it could set the stage for the Federal Reserve’s next moves and impact the dollar’s direction.

Indices struggled on Thursday, with European markets taking a heavy hit and major US indices showing signs of weakness despite strong earnings reports earlier in the week. Friday’s European session opened with a small bullish reversal attempt, but it remains uncertain if this momentum will carry through the day. Precious metals like gold and silver saw a midweek correction but continue to trade near long-term highs, maintaining a cautiously positive outlook. Oil, after a rough start to the week, is attempting a recovery, showing some gains in the latter part of the week.

Currencies are showcasing a mixed landscape. The Swiss franc is under pressure following disappointing inflation data, while the Japanese yen remains weak, continuing its trend from earlier in the week. On the other hand, the British pound and Canadian dollar are stronger as we start Friday’s session. The euro has held its ground well, supported by stronger-than-expected inflation data earlier in the week.

Source: https://www.axiory.com/analytics/market-news/euro-gains-on-stronger-cpi-swiss-franc-weakens-ahe