The economic calendar remains quiet in European hours, with Swiss Trade Balance figures amounting to the only bit of noteworthy event risk on the docket. The trade surplus is expected to edge to CHF 2.1 billion in April, marking a hairline improvement over the prior month. The release probably won’t meaningful direction cues to the Swiss Franc considering its limited implications for SNB monetary policy. Indeed, with the central bank forecasting inflation below 1 percent through 2015, Thomas Jordan and company seem unlikely to step away from an ultra-accommodation policy regime for some time yet.
Elsewhere, traders will continue to watch sideline commentary from the ECB Conference on Central Banks going into its third day in Sintra, Portugal. Policymakers have gathered to discuss ways to address the lingering disinflation problem in the Eurozone with an eye to potentially introduce an expanded stimulus effort as soon as next week. Dovish rhetoric from the summit has failed to apply downward pressure on the Euro thus far but that can swiftly change if vague pronouncements about the severity of the situation are replaced with actionable policy prescriptions. We remain short EUR/USD.
The spotlight turns to US data later in the day, with April’s Durable Goods Orders report and May’s Consumer Confidence reading on the docket. US economic news-flow has increasingly improved relative to expectations in early April, suggesting analysts are underestimating the economy’s resilience and opening the door for upside surprises. Such outcomesare likely to help scatter doubts about continued “tapering” of QE asset purchases, stoking speculation about subsequent interest rate hikes and boosting the US Dollar.
