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Barry Norman

EUR/GBP Fundamental Analysis – November 5, 2015 - Forecast
Analysis and Recommendations:

The EUR/GBP declined as the euros weakened after comments from Mario Draghi while the pound remained steady after a slight miss in Services PMI. The euro will depreciate toward $1.05 by year-end as the ECB will potentially boost its asset-purchase program and cut its deposit rate, said Robert Rennie, head of financial markets strategy at Westpac Banking Corp. in Sydney.

The final set of October’s UK PMI figures headlines the economic calendar in European trading hours, with the rate of overall cross-sector activity growth expected to accelerate for the first time in four months. The trend in UK news-flow has cautiously improved relative to consensus forecasts over recent months opening the door for an upside surprise.

That may boost BOE policy bets, sending the British Pound higher. Near-term follow-through may be limited however, with investors probably reluctant to take firm directional views ahead to this week’s monetary policy announcement.

Later in the day, Fed “liftoff” speculation returns to the forefront as the ISM Non-manufacturing Composite gauge as well as ADP Employment data are released. If that were not enough, traders will also have to contend with a packed schedule of Fed commentary.

The markets have a sense of most Fed officials’ bias. Governor Brainard leans dovish while Chair Yellen, Vice Chair Fischer and New York Fed President Dudley are the core middle ground cautiously mulling a December hike. None of this ought to sound novel. Comments from Philadelphia Fed President Harker may be interesting however as markets learn about the newcomer replacing veteran hawk Charles Plosser.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases:

Cur.

 

Event

Actual

Forecast

Previous

 

  USD

 

API Weekly Crude Oil Stock

2.800M

 

4.100M

 

 

  NZD

 

Employment Change (QoQ) (Q3)

-0.4%

0.4%

0.1%

   

  NZD

 

Unemployment Rate (Q3)

6.0%

6.0%

5.9%

 

 

  AUD

 

Retail Sales (MoM) (Sep)

0.4%

0.4%

0.4%

 

 

  AUD

 

Trade Balance (Sep)

-2.317B

-3.000B

-2.711B

   

  CNY

 

Caixin Services PMI (Oct)

52.0

50.8

50.5

 

 

  EUR

 

German Services PMI (Oct)

54.5

55.2

55.2

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  EUR

 

Markit Composite PMI (Oct)

53.9

54.0

54.0

 

 

  EUR

 

Services PMI (Oct)

54.1

54.2

54.2

 

 

  GBP

 

Services PMI (Oct)

54.9

54.5

53.3

 

 

  USD

 

FOMC Member Brainard Speaks 

 

 

 

 

 

  USD

 

ADP Nonfarm Employment (Oct)

 

180K

200K

   

 

Upcoming Economic Events that you should be monitoring:

Wednesday, November 4, 2015

Cur.

 

Event

Actual

Forecast

Previous

 

  AUD

 

RBA Governor Stevens Speaks  

 

 

 

 

 

  JPY

 

Monetary Policy Meeting Minutes

 

 

 

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  EUR

 

German Factory Orders (MoM) (Sep)

 

1.0%

-1.8%

 

 

  EUR

 

ECB Economic Bulletin  

 

 

 

 

 

  EUR

 

Retail Sales (MoM) (Sep)

 

0.2%

0.0%

 

 

  EUR

 

ECB President Draghi Speaks  

 

 

 

 

 

  GBP

 

Interest Rate Decision (Nov)

 

0.50%

0.50%

 

 

  GBP

 

BoE MPC Meeting Minutes

 

 

 

 

 

  GBP

 

BoE Gov Carney Speaks  

 

 

 

 

 

  USD

 

FOMC Member Dudley Speaks  

 

 

 

 

 

  USD

 

Initial Jobless Claims

 

262K

260K

 

 

  USD

 

Unit Labor Costs (QoQ) (Q3)  

 

2.3%

-1.4%

 

 

  USD

 

FOMC Member Stanley Fischer 

 

 

 

 

 

  USD

 

FOMC Member Lockhart Speaks 

 

 

 

   

Government Bond Auctions

Date Time Country

Nov 03 10:10 Austria Holds RAGB bond sale

Nov 04 15:30 Sweden Announces details of Bond on 11 Nov

Nov 04 N/A Holland Announces details of Bond on 10 Nov

Nov 05 09:30 Spain Auctions Bonos

Nov 05 09:50 France Auctions OATs

Nov 05 10:03 Sweden Holds I/L bond auction

Nov 09 12:00 Norway Details bond auction on 11 Nov

Nov 09 15:30 Italy Announces details of BTPs/CCTeu on 12 Nov

Nov 09 N/A US Holds 3-year note auction

Nov 10 10:30 UK 0.125% 2058 I/L Gilt auction

Nov 10 N/A Holland Eur 2.0-3.0bn 0% Apr 2018 DSL

Nov 10 N/A US Holds 10-year note auction

Nov 11 10:03 Sweden Holds bond auction

Nov 11 11:15 Norway Holds bond auction

Nov 11 10:30 Germany Eur 3bn 0.25% Oct 2020 Bobl

Nov 12 10:10 Italy Auctions BTPs/CCTeus

Nov 12 10:30 UK 4.25% 2039 Gilt auction

Nov 12 N/A US Holds 30-year bond auction

 

 

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