FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs
- EURUSD balks at $1.3600 on weaker German labor data.
- Euro-Zone PMI figures a touch softer, signaling “top” in growth.
- See noteworthy events on the global FX economic calendar for the week of September 29 to October 4, 2013.
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EURO-ZONE ECONOMIC CALENDAR
German labor market data surprised lower by a fair margin in September, stirring concerns that regional economic activity may have reached its apex midsummer. Indeed, the slight retracement in individual Euro-Zone countries’ PMI figures points to a “top” in growth having been reached in the near-term, as it appears that a lack of credit growth in the Euro-Zone has become a drag.
This concern dates back to early-August when ECB President Draghi first noted the decline in Euro-Zone excess reserves. As noted several weeks ago, we believe there have been indications that another LTRO may be in the works, which would be EUR-negative similar to December 2011 and February 2012.
UK ECONOMIC CALENDAR
The slowdown in Euro-Zone economic activity midyear has manifested itself in UK economic data, as the September PMI Manufacturing report showed today. A softer than expected print has manufacturing activities near a two-year peak, but slightly off of its yearly high seen midsummer. The UK economy is significantly stronger than where it was just one year ago; and resiliency in data is expected barring a deeper drag in Euro-Zone economic activity.
SWISS ECONOMIC CALENDAR
There are no data due for the Swiss Franc on Tuesday, October 1.
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--- Written by Christopher Vecchio, Currency Analyst
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