The Euro-Zone posted a s.a. trade deficit of EUR 1.3 bln in October, up from a deficit of EUR 4.4 bln in September. This reflects a 2.5% m/m decline in exports, which was outweighed by an even stronger 4.6% m /m drop in nominal imports. The latter will have been impacted by lower oil prices that months and real imports are likely to have risen in October, which means the improvement in the nominal trade deficit does not mean that net exports are making a positive contribution to growth. Unadjusted data showed a trade surplus of EUR 0.9 bln, down from a surplus of EUR 4.2 in October last year and versus a deficit of EUR 4.5 bln in September.
Meanwhile, the EUR/USD's pull back was instigated by a quasi-official name selling the pair from the 200-day moving average, which comes in around 1.4715 today. The interest turned the EUR/USD back below 1.4700 and the retraced extended to 1.4613 amid heavy EUR/JPY selling from a French corporate account. Also hitting Dow Jones news wire during the foray was Germany's IMK calling for the ECB to cut interest rates to 1%. The EUR/USD is expected to remain a buy on dips, with focus on the 1.5000 handle, while the EUR/GBP speculators eyes a move on parity now that 0.9500 has given way.
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