EUR/USD
A relaxed atmosphere flowed in the market on Monday, like today's meeting of Donald Trump with Kim Jong-Un. Italian Finance Minister Giovanni Tria stated the government's desire to stay in the euro area, which, naturally, did not become a revelation, and investors focused on the forthcoming meetings of the Fed and the ECB. The volume of industrial production in Italy in April fell by 1.2% against the forecast of -0.7%.
On the part of economic indicators, the situation in the euro zone is deteriorating. Today, sentiment indicators in business sectors in Germany and the euro zone ZEW for the current month are scheduled to be released. German ZEW Economic Sentiment is expected at -14.6 points against -8.2 in May, in the euro area 0.1 against 2.4 earlier. This means that sentiment fell to the level of November 2012. In the US, the consumer price index for May is expected to grow by 0.2%, the base CPI is projected to grow by 0.1%. Year-on-year, the total CPI is expected to increase from 2.5% y/y to 2.7% y/y, the base CPI growth from 2.1% y/y to 2.2% y/y.
Tomorrow, the euro area industrial output April estimate will be released - a forecast of -0.5% The probability that the Fed raises the rate is at 93%. We expect the euro to fall to 1.1620 and lower to 1.1510 (as the ECB decision on monetary policy may be softer than investors' expectations due to the deterioration of the euro area economic indicators and confirmation by Donald Trump of the intention to engage a trade war with the EU.