Mark your calendars for 22 August, Thursday this week
After remarks from ECB's Rehn last week, expectations and hopes have been raised for a more profound stimulus package to be introduced next month by the central bank.
Looking ahead to this week, Jackson Hole may provide some more clues on that if we do see some ECB members on the agenda but prior to that we could get more potential hints via the August flash PMI prints on Thursday:
0715 GMT - France August flash manufacturing, services, composite PMI
- Manufacturing: Expected 49.5; Prior 49.7
- Services: Expected 52.5; Prior 52.6
- Composite: Expected 51.8; Prior 51.9
0730 GMT - Germany August flash manufacturing, services, composite PMI
- Manufacturing: Expected 43.0; Prior 43.2
- Services: Expected 54.0; Prior 54.5
- Composite: Expected 50.6; Prior 50.9
0800 GMT - Eurozone August flash manufacturing, services, composite PMI
- Manufacturing: Expected 46.6; Prior 46.5
- Services: Expected 53.0; Prior 53.2
- Composite: Expected 51.2; Prior 51.5
With plenty of talk on potential German fiscal stimulus as well, pay keen attention to the German prints. A further deterioration in sentiment will no doubt push the ECB towards a stronger stimulus introduction in September.
The big question remains whether or not they will need to reintroduce QE this quickly but Rehn's comments suggest that they are looking at that possibility already.
Hence, further decline in the economic outlook from the releases above could elevate market expectations even more and prove to be a drag on the euro this week.
