The Euro may be in for an active session as traders size up November’s set of flash PMI figures while EU leaders gather to hash out the region’s seven-year budget.
Talking Points
- Euro May See Selling Pressure if PMI Data Boosts ECB Rate Cut Bets
- EU Budget Deal May Prove Harder to Achieve Amid Euro Debt Crisis
The preliminary set of November’s Eurozone PMI figures headlines the economic calendar in European hours. Expectations suggest the region-wide composite gauge will remain unchanged 45.7, showing manufacturing- and service-sector activity contracted at the fastest pace since June 2009 for a second consecutive month.
A print in line with expectations is unlikely to yield a strong reaction from the Euro in and of itself. Indeed, traders have had ample opportunity to price in the depth of the Eurozone recession as it stands at the moment. A disappointing outcome may weigh on the single currency however as compounding malaise boosts expectations of additional ECB easing.
Meanwhile, EU leaders will meet to hammer out the region’s seven-year budget. Familiar issues have resurfaced, with France arguing against proposed cuts to its cherished Common Agricultural Policy (CAP) that heavily subsidizes the country’s farmers while the UK threatens a veto if spending is not reduced to mirror austerity at the member-state level.
While this is a familiar battle that has emerged time and again in EU budget negotiations only to end in compromise, the backdrop of the Eurozone debt crisis may make for a more heated outing this time. EU coffers are a major source of cash for those “PIIGS” countries already running bailout programs.
A final deal is not due until tomorrow but traders will keep a close eye on sideline commentary to gauge the tone of the proceedings. Signs of deadlock may spark risk aversion, boosting the safe-haven US Dollar.
Asia Session: What Happened
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
21:45 |
Net Migration s.a. (NOV 16) |
260 |
- |
140 (R+) |
|
1:45 |
CNY |
HSBC Flash Manufacturing PMI (NOV) |
50.4 |
- |
49.5 |
5:00 |
Supermarket Sales (YoY) (OCT) |
-4.0% |
- |
-2.0% |
|
7:30 |
JPY |
Bank of Japan Releases Monthly Report |
- |
- |
- |
Euro Session: What to Expect
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
- |
EUR |
EU Leaders Hold Summit on Seven-Year Budget |
- |
- |
High |
8:00 |
EUR |
French PMI Services (NOV P) |
45.0 |
44.6 |
Low |
8:00 |
EUR |
French PMI Manufacturing (NOV P) |
44.0 |
43.7 |
Low |
8:30 |
EUR |
German PMI Manufacturing (NOV A) |
46.0 |
46 |
High |
8:30 |
EUR |
German PMI Services (NOV A) |
48.3 |
48.4 |
High |
9:00 |
EUR |
Euro-Zone PMI Composite (NOV A) |
45.7 |
45.7 |
High |
9:00 |
EUR |
Euro-Zone PMI Services (NOV A) |
46.0 |
46 |
High |
9:00 |
EUR |
Euro-Zone PMI Manufacturing (NOV A) |
45.6 |
45.4 |
High |
11:00 |
CBI Trends Total Orders (NOV) |
-20 |
-23 |
Medium |
|
11:00 |
GBP |
CBI Trends Selling Prices (NOV) |
7 |
7 |
Medium |
Critical Levels
CCY |
SUPPORT |
RESISTANCE |
1.2766 |
1.2896 |
|
1.5905 |
1.6003 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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