• EUR/USD found little support from ECB Economic Bulletin.
• US Initial Jobless Claims provided little spark for markets.
• Euro traders look to Friday’s Germany HICP inflation.

EUR/USD tested into a near-term low of 1.0741 on Thursday as the latest Economic Bulletin from the European Central Bank (ECB) provided little new information for investors looking for guidance on when to expect rate cuts. The ECB continues to grapple with a lopsided European economy. Euro area price pressures remain higher than the ECB would like to see despite an ongoing softening in broad economic figures and faltering growth for the European economy.

US Initial Jobless Claims came in slightly better than expected, but a mid-tier data schedule for the US this week is keeping broad-market risk appetite hanging relatively in the middle.

Daily Digest Market Movers: EUR/USD remains caught in near-term cycle

• ECB’s Economic Bulletin reveals little new, peels back the layers on hampered ECB.
  • Inflation continues to decline.
  • Rates will remain sufficiently restrictive.
  • Inflation is expected to keep easing through 2024.
  • Economic risks remain tilted to the downside.
  • Elevated wage growth, declining labor productivity keeps price pressure high.
• US Initial Jobless Claims printed at 218K for the week ended February 2, markets expected 220K.
• Four-week average Initial Jobless Claims ticked higher to 212.25K from 208.5K (revised up from 207.75K).
• Richmond Federal Reserve (Fed) President Thomas Barkin on Thursday:
  • Fed Chairman Jerome Powell speaks for the Federal Open Market Committee, will not undercut or explain the Chairman’s statements.
  • Fed remains focused on inflation and unemployment, not US government debt.
  • An economic downturn would be a case for a rate cut.
  • The Fed has plenty of time to remain patient on rate changes.
  • Fed is in no rush to cut rates.
  • Barkin won’t take too much signal from single-month data.
  • Remains cautious regarding the accuracy of economic numbers at the start of the year, but data remains remarkable.
• Friday’s YoY German Harmonized Index of Consumer Prices (HICP) inflation report is expected to hold steady at 3.1% for January, with the MoM figure likewise forecast to hold steady at -0.2%.