The EUR/CHF pair ended a mixed week after the huge load of fundamentals and events seen through the week, where the optimism spread in the market on Thursday supported the pair to gain slight strength this week, but in general the pair fluctuated heavily and was very volatile as we expected, where the increase in volumes supported the pair to move violently.
The euro was able to gain strength against the Swiss franc in the first three sessions; however, the downbeat French bond sale supported the Franc to recover some of the losses incurred against the euro.
Moreover, the European Central Bank’s announcement, which showed that the overnight deposits surged to all time record, affected the euro sharply and supported the Swiss franc to gain slight momentum and recover more losses.
This week, the pair will be more volatile and could fluctuate very sharply, as several euro zone nations are preparing for bond auctions, where all eyes will be focused on the yields and demand on those bonds, noting that the euro area region has more than 157 billion of debt maturing in the first quarter of 2012.
Turning to the critical fundamentals awaited this week, the European Central Bank rate decision will highlight our session in addition to theSwitzerland’s unemployment rate and retail sales. Eyes will be focused on the ECB rate decision which is expected to linger at 1.0%, where the Bank will not move and lower rates further unless it was forced into quantitative easing.
Other news from the euro area and Switzerland to affect the pair this week:
Monday January 9:
Switzerlandwill start this week at 06:45 GMT with the unemployment rate for December, where the non-seasonally adjusted rate is expected higher at 3.3% compared with the previous of 3.1%. In addition, the seasonally adjusted rate could have climbed to 3.1% from 3.0%.
Germanywill join this week at 07:00 GMT with the trade balance figures for November, with expectations the trade surplus could have expanded to 12.0 billion euros from the previous 11.6 billion euros surplus. In addition, the seasonally adjusted exports index is projected to expand by 0.8% from the previous drop of 3.6%, while the seasonally adjusted imports previous index was -1.0%. Furthermore, the current account previous surplus was 10.3 billion euros.
At 08:15 GMTSwitzerlandwill provide markets with the retail sales for November, which dropped in the previous month by 0.2%.
At 11:00 GMTGermanywill provide the industrial production index for November, where the non-seasonally adjusted annual index is expected to expand by 3.6% from the previous expansion of 4.1%, while the seasonally adjusted monthly index could have fallen by 0.5% from the previous growth of 0.8%.
Auctions:
Slovakiawill auction bonds at 10:00 GMT, whileGermanywill auction bonds at 10:15 GMT and finallyFrancewill sell bonds at 14:00 GMT.
Tuesday January 10:
Auctions:
Netherlandswill sell bonds at 09:00 GMT.
Austria,MaltaandGreecewill auction bonds at 10:00 GMT.
Sloveniawill auction bonds at 12:00 GMT.
Wednesday January 11:
Auctions:
Germanywill sell bonds at 10:15 GMT.
Thursday January 12:
Germanywill start the session at 07:00 GMT with the final consumer price index for December, where the monthly index is expected unrevised at 0.7%, while the annual index is projected unchanged at 2.1%. In addition, the CPI EU harmonised monthly index is expected steady at 0.8%, while the annual index could have lingered at 2.4% in the month of December.
The euro zone will join this week today at 10:00 GMT with the industrial production index for November, where the monthly index could have dropped by 0.2% from the prior drop of 0.1%, while the annual index previous reading was 1.3%.
At 12:45 GMT the European Central Bank’s Governing Council will announce interest rates.
At 13:30 GMT Mario Draghi, the European Central Bank President, will speak at the press conference.
Auctions:
Spainwill auction bonds at 09:30 GMT, whileItalywill auction bonds at 10:00 GMT
Friday January 13:
The euro zone will start the session at 10:00 GMT with the trade balance figures for November, where the seasonally adjusted trade surplus previous reading was 0.3 billion euros, while the non-seasonally adjusted surplus was 1.1 billion euros.
Auctions:
Italywill auction bonds at 10:00 GMT.
Originally posted here
