Mario Draghi will chair his last ECB meeting today and leave the European Central Bank divided like it has never been before. His actions as ECB President will have an impact on the Eurozone long after her has moved on. Some credit him with saving the breakup of the Euro, but history will be the judge if he may have started the total destruction on the it. The economy remains fundamentally weak, the risk of deflation elevated and the fiscal outlook unstable. All this while Draghi has ushered on the era of negative interest rates in the Eurozone.

Just as many big banks have increased their bullish calls on the Euro on the back of an expected pick-up in economic activity, hard data pointed to the opposite. April PMI data was anticipated to point towards a rebound following a weak first-quarter, but today’s release pointed towards further contraction across key industries. Germany, the leader of the export oriented Eurozone economy, saw its Manufacturing PMI clock in at 44.5, below the expected reading of 45.0 and little changed from the 44.1 reported in March.

Forex traders received another healthy dose of global PMI reports which spanned from Australian through the Eurozone into the US. The trend which started in 2018 continued as more and more global PMI reports come in below expectations. This all points towards a steeper economic slowdown than many analysts and economists anticipated. A lot of traders have not fully priced in the effects of this slowdown. Central banks are likely to turn more dovish and follow the US Fed 180 degree policy change which will have ripple effects across the global financial system.

Many still debate if we have a trade war on our hands already, or if it is more of a trade conflict or just trade fears. Regardless of where one stands in the assessment of the current trade environment, global markets have already started to to show signs of disruptions in the supply chain. Since last week, a currency war may be sniping down currencies before the full impact of a trade war can start counting casualties.

This week was filled with PMI reports which gave some key insights about how different economies are performing. This directly influences the currency of the country and forex traders need to always pay close attention to key economic reports.

All eyes have been on the European Central Bank since it started to reduce interest rates last year which led to its main interest rate at 0.05%, its marginal lending facility rate at 0.20% and its deposit facility rate of -0.20%.