On August 14, at 17:00 Beijing time, the European statistics agency will release the Eurozone's second-quarter GDP annual growth rate, which financial markets anticipate will remain unchanged at 1%. Simultaneously, the Eurozone's June unadjusted trade balance data will be published, with a previous deficit of 78 billion euros and a market forecast deficit of 22 billion euros. GDP data is a key indicator for measuring a country or region's total value of goods output, and its release could significantly impact the euro and European stock markets.
The UK Statistics Authority released the UK's second-quarter GDP annual growth rate yesterday, with the latest figure at 1.2%, exceeding the market expectation of 1.1% and significantly higher than the previous value of 6.9%. This suggests a potential acceleration in the UK's economic recovery during the second quarter. Although the UK has left the EU, the economic, trade, and financial ties between the two remain strong. As shown in the chart, the GDP growth rates of the UK and the Eurozone have a strong correlation, allowing for predictions of Eurozone data fluctuations based on UK GDP performance. Given the UK's better-than-expected second-quarter GDP results, the Eurozone's second-quarter GDP growth rate is likely to be above 1%, which could potentially boost the euro and European stock markets.
The trade balance, which is the difference between imports and exports, indicates a trade deficit when negative, suggesting the country's goods are less attractive in the international market. The Eurozone's trade deficit in May was 78 billion euros, marking the second consecutive month of a negative balance, with the absolute value continuously expanding and reaching its lowest point since April 2023. The current market forecast of a 22 billion euro deficit implies a narrowing of the deficit. If this materializes, the euro could be supported following the data release. The trade balance curves of the UK and the Eurozone also show a degree of correlation, but the consistency is not strong and should only be used as a general reference. The UK's trade deficit in June was 55.4 billion pounds, with an absolute value greater than May's 34.6 billion pounds, indicating a widening trade deficit. Based on this, the Eurozone's trade deficit in June may also expand. If the actual data exceeds expectations, the euro could face significant downward pressure.
In terms of market performance, EURUSD is currently trading at 1.1552, which is in the middle-to-upper range of a monthly-level, ultra-wide consolidation pattern since 2015. From a technical perspective, there is a potential for a downward correction. As shown in the chart, the blue line, representing the Eurozone's GDP annual growth rate, has at times moved in tandem with EURUSD, particularly between 2020 and 2021. However, there have also been periods of weak correlation, such as from 2021 to 2023, when the Eurozone's GDP growth rate remained relatively flat while EURUSD experienced a sharp decline. Based on this, while the Eurozone's GDP data to be released at 17:00 today is important, it primarily serves as a basis for analyzing the Eurozone's macroeconomic conditions, and its impact on the medium-to-long-term trend of EURUSD may not be significant.
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