Flash PMI Numbers Put the EUR in the Spotlight

The Dollar sees red early on, with private sector PMI numbers out of the Eurozone and the U.S alongside geo-political risk the key drivers today.
Bob Mason
EuroDollar Notes

Earlier in the Day:

There were no material stats released through the Asian session this morning to provide direction, volumes on the lighter side with Japanese markets being closed for the day.

Following the U.S holiday on Thursday, it was a relatively flat start to the day, with the Japanese Yen flat at ¥112.95 against the U.S Dollar and the Aussie Dollar down by 0.1% to $0.7253, while the Kiwi Dollar’s struggles continued, the Kiwi down 0.09% to $0.6808 at the time of writing, a pullback to $0.67 levels on the cards in spite of a shift in sentiment towards FED monetary policy for next year.

For the Asian equity markets, the ASX200 found relief for a 2nd consecutive day, with a 0.53% gain at the time of writing, while the CSI300 and Hang Seng saw red, the pair down 1.32% and by 0.73% respectively at the time of writing, investor caution ahead of next week’s Trump – Xi meeting weighing, with the majors being given little direction until U.S Treasuries start trading later in the day.

The Day Ahead:

For the EUR, economic data scheduled for release this morning is on the heavier side, with key stats including November prelim private sector PMI numbers out of France, Germany and the Eurozone, with Germany’s 2nd estimate GDP numbers for the 3rd quarter also scheduled for release.

Barring deviation from first estimate numbers, we will expect the private sector PMI figures to have the greatest impact, with the markets looking for some stabilization in economic indicators and in Germany in particular, following the 3rd quarter contraction.

Outside of the stats, there may be more chatter on Italy, as the EU Commission works on punitive measures, with Italy’s responses to the Establishment’s demands likely to be of greater interest.

At the time of writing, the EUR was up 0.13% to $1.1399, with today’s private sector PMI numbers and budget chatter the key drivers through the day.

For the Pound, another quiet day on the data front leaves Brexit in the spotlight, with the Pound holding firm early in the day despite some negative press on the deal reached mid-week, with some raising doubts of the deal being ratified by Parliament should the required 20 EU member states support the deal this weekend.

At the time of writing, the Pound was down 0.01% at $1.2875, with Brexit news the key driver through the day.

Across the Pond, economic data is limited to November prelim private sector PMI numbers, the Dollar needing the numbers to be in line with or better than forecasts to avoid a further pullback, mixed sentiment towards FED policy for next year likely to see the Dollar more sensitive to any slower private sector activity.

At the time of writing, the Dollar Spot Index was down 0.25% to 96.470, today’s stats and the Oval Office in focus, while volumes will likely be particularly light through the U.S session.

For the Loonie, it’s a busy day ahead with key stats scheduled for release including October’s inflation figures and September’s retail sales numbers that will have a material impact on the Loonie following a quiet week on the data front.

The Loonie was down 0.13% to C$1.3207 against the U.S Dollar at the time of writing, with today’s stats the key driver, forecasts being Loonie positive.

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