European FX Outlook: The PMI day ahead

Mario Blascak, PhD Independent Analyst

What you need to know before markets open
• Set of flash manufacturing and services activity reports is scheduled for Tuesday with Eurozone PMI seen decelerating slightly.
• US President about to appoint new Federal Reserve chairman.

Tuesday’s market moving events
•   French manufacturing PMI is expected to pick up slightly to 56.2 in October, while services PMI is expected to remain flat at 57.0.
•   German manufacturing PMI is expected to decelerate to 60.1 in October while services PMI are to remain flat at 55.5.
•   Eurozone’s manufacturing PMI is set to decelerate slightly to 57.9 in October and services to correct lower to 55.7.
•   US flash manufacturing PMI is expected to rise to 53.3 in October while services are to remain flat at 55.2.
•   Richmond Fed manufacturing index is expected to fall to 17 in October from reading of 19 in September.

Major forex market movers
•   US Dollar was unable to hold onto gains above ¥114.00 mark on Monday with USD/JPY falling to ¥113.20 territory and closing the gap it opened with after Sunday’s elections in Japan.
•   EUR will be in a spotlight with flash manufacturing and services activity due on Tuesday.
•   The US Dollar should be underpinned by Trump announcing he is going to pick new Fed chairman soon.

Monday’s macro summary
•   Catalan PM Puigdemont called for a parliamentary session on Thursday with the risk of Independence declaration weighing on euro in tandem with the ECB announcement of asset purchasing program taper due on Thursday later this week.
•   Optimism about business conditions in the UK fell for the first time in a year, a report from Confederation of British Industries showed in October.
•   Canada’s wholesale prices rose 0.5% m/m in August after rising 1.5% m/m in July.
•   US President Trump is set to appoint the Federal Reserve chairman “soon”.

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

EUR/USD weakens as US jobs data trims Fed rate cut bets

The EUR/USD pair trades in negative territory for the third consecutive day near 1.1860 during the early European session on Thursday. Traders will keep an eye on the US weekly Initial Jobless Claims data. On Friday, the attention will shift to the US Consumer Price Index inflation report.

GBP/USD bullish outlook prevails above 1.3600, UK GDP data looms

The GBP/USD pair gains ground near 1.3635, snapping the two-day losing streak during the early European session on Thursday. The preliminary reading of UK Gross Domestic Product for the fourth quarter will be closely watched later on Thursday. The UK economy is estimated to grow 0.2% QoQ in Q4, versus 0.1% in Q1.

Gold remains on the defensive below two-week top; lacks bearish conviction amid mixed cues

Gold sticks to modest intraday losses through the Asian session on Thursday, though it lacks follow-through selling and remains close to a nearly two-week high, touched the previous day. The commodity currently trades above the $5,070 level, down just over 0.20% for the day, amid mixed cues.

UK GDP set to post weak growth as markets rise bets on March rate cut

Markets will be watching closely on Thursday, when the United Kingdom’s Office for National Statistics will release the advance estimate of Q4 Gross Domestic Product. If the data land in line with consensus, the UK economy would have continued to grow at an annualised pace of 1.2%, compared with 1.3% recorded the previous year.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

Sonic Labs’ vertical integration fuels recovery in S token

Sonic, previously Fantom (FTM), is extending its recovery trade at $0.048 at the time of writing, after rebounding by over 12% the previous day. The recovery thesis’ strengths lie in the optimism surrounding Sonic Labs’ Wednesday announcement to shift to a vertically integrated model, aimed at boosting S token utility.