European FX Outlook: UK manufacturing set to dominate Friday

What you need to know before markets open:
•    Stock markets declined after the US Senate said the tax cut bill will be enacted in 2019. 
•    Oil keeps rising since Saudi Arabia launched its run on corruption imprisoning high-fly business and politicians.

Friday’s market moving events
•    The RBA cuts inflation forecasts, to be lower for longer
•    French industrial production is expected to rise 0.6% m/m in September. 
•    French Q3 non-farm payrolls are expected to rise 0.3% q/q.
•    The UK manufacturing output is expected to increase by 0,3% m/m while decelerating to 2.4% y/y in September.
•    The UK trade balance is set to record deficit of £12.8 billion in September.
•    NIESR is expected to publish UK GDP forecast at 0.4% q/q.
•    Preliminary Michigan consumer confidence for November is expected to remain flat at 100.7.
•    ECB´s Mersch is due to deliver a speech at 2017 Cumberland Lodge Financial Services Summit in Windsor, the UK at 12:30 GMT.
•    ECB´s president Mario Draghi is due to deliver remarks at the annual meeting organized by Medici con l'Africa Cuamm in Milan, Italy on Saturday, November 11 at 10:00 GMT.

Major forex market movers
•    EUR was lifted 0.5% after news of the European Commission lifting the GDP forecast for Eurozone and the US Senate confirming that the tax cut plan will be only valid since 2019.
•    Sterling will be in the epicenter of market attention with a set of macro data including manufacturing output, trade balance and the GDP estimate.

Thursday’s macro summary
•    Business sentiment in both services and industrial sector in France increased by one point to 102 and 106 points, with the Bank of France now forecasting Q4 GDP at 0.5% q/q. 
•    German trade surplus reached €21.8 billion in September with exports falling -0.4% m/m and import down -1.0% m/m.
•    ECB’s supervisory board chair Daniele Nouy said NPLs weigh on banks’ profits as the bank prepares draft addendum in line with the Council conclusions on NPLs which were adopted in June.
•    Winter economic forecast of the European Commission raised the prediction of economic growth for Eurozone to the highest level in 10 years while expecting the UK to heads into an extended slowdown.
•    New house prices in Canada rose 0.2% in September, reflecting increases in metropolitan areas.
•    The US weekly jobless claims rose 239K during the week ending November 4, up from 229K reported in the prior week.
•    Swiss National Bank governor Jordan said that negative interest rates are still needed.
•    The US House approves a major overhaul of a tax code that slashes corporate tax rate to 20% from 35% while the version of the same plan from Senate sets permanent 20% corporate tax rate with 1-year delay.
•    The US Senate´s tax plan meets $1.5 trillion federal deficit ceiling for tax legislation while keeping 7 individual tax brackets, with top earners paying 38.5%, down from 39.6%. It also ends the individual deduction for state and local taxes, while keeps business deduction. Senate plan sets 10% tax rate for US companies with IP in foreign low-tax jurisdictions. The tax plan eliminates net operating loss carry-backs for businesses and allows full expensing on business capital investments for five years. Tax cut plan sets no special “pass-through” tax rate and lets business owners deduct about 17.4% of business income from individual tax.
 

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