Markets had little macro data to work off in today’s session, with the exception of a larger-than-expected fall in the German Ifo business climate index from 99.3 in January to 98.5 in February – the weakest print since December 2014. While Germany barely avoided a recession last year – GDP growth was nil in Q4 following a 0.2% qoq contraction in Q3 – there has so far been little evidence that economic growth rebounded in Q1 2019 in the Eurozone’s largest economy.
The EUR/USD cross is broadly unchanged from yesterday but this is partly due to the Dollar’s ongoing, albeit slow, slide to a three week low in trade-weighted terms. Other major crosses have also been broadly stable with markets seemingly unsure of the future trajectory of major developments, including central bank monetary policy, trade negotiations between the US and China and Brexit negotiations which may well be entering their final straight.
