The Euro is at risk as October’s PMI data aim to point toward continued recession, hinting at ECB rate cuts ahead. The Aussie soared in Asia as CPI topped estimates.
The Euro is at risk as October’s PMI data aim to point toward continued recession, hinting at ECB rate cuts ahead. The Aussie soared in Asia as CPI topped estimates.
Talking Points
- Euro May Fall as PMI Data Rekindles ECB Rate Cut Expectations
- Bounce in German IFO Unlikely to Prove Materially Supportive
- Australian Dollar Outperforms as CPI Bolsters RBA Policy Outlook
The European economic calendar heats up today, with the spotlight on October’s preliminary set of Eurozone manufacturing- and service-sector PMI figures. The region-wide composite gauge is expected to show activity shrank for the ninth consecutive month. Similarly bleak readings are broadly expected from PMIs tracking Germany and France. Such outcomes may rekindle bets on additional ECB stimulus measures as recession continues to grip the currency bloc, weighing on the Euro.
Separately, the German IFO gauge of business confidence is forecast to show mild improvement. The headline Business Climate reading is seen edging higher to 101.6 in October after hitting a 22-month low in September. The narrow improvement seems unlikely to offer much support for the single currency against a backdrop of worrying PMI figures, particularly considering the persistent slide in sentiment since May.
The Australian Dollar outperformed in overnight trade, adding as much as 0.5 percent against its top counterparts. The rally came as third-quarter Australian CPI figures topped economists’ expectations, pushing forex traders to downgrade expectations for additional RBA interest rate cuts. The data showed the annual pace of inflation accelerated to 2 percent, marking the highest reading since the three months through January 2011.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
0:00 |
AUD |
DEWR Internet Skilled Vacancies (MoM) (SEP) |
-3.7% |
- |
-3.4% (R-) |
|
0:30 |
AUD |
Consumer Prices Index (QoQ) (3Q) |
1.4% |
1.0% |
0.5% |
|
0:30 |
AUD |
Consumer Prices Index (YoY) (3Q) |
2.0% |
1.6% |
1.2% |
|
0:30 |
AUD |
RBA Trimmed Mean (QoQ) (3Q) |
0.7% |
0.6% |
0.6% (R+) |
|
0:30 |
AUD |
RBA Trimmed Mean (YoY) (3Q) |
2.4% |
2.2% |
2.0% |
|
0:30 |
AUD |
RBA Weighted Median (QoQ) (3Q) |
0.8% |
0.6% |
0.7% |
|
0:30 |
AUD |
RBA Weighted Median (YoY) (3Q) |
2.6% |
2.2% |
2.2% |
|
1:45 |
CNY |
HSBC Flash Manufacturing PMI (OCT) |
49.1 |
- |
47.9 |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
7:00 |
EUR |
French PMI Manufacturing (OCT P) |
44.0 |
42.7 |
Medium |
|
7:00 |
EUR |
French PMI Services (OCT P) |
45.4 |
45.0 |
Medium |
|
7:30 |
EUR |
German PMI Services (OCT A) |
50.0 |
49.7 |
High |
|
7:30 |
EUR |
German PMI Manufacturing (OCT A) |
48.0 |
47.4 |
High |
|
8:00 |
EUR |
German IFO – Expectations (OCT) |
93.6 |
93.2 |
Medium |
|
8:00 |
EUR |
German IFO – Current Assessment (OCT) |
110.0 |
110.3 |
Medium |
|
8:00 |
EUR |
German IFO – Business Climate (OCT) |
101.6 |
101.4 |
Medium |
|
8:00 |
EUR |
Euro-Zone PMI Services (OCT A) |
46.4 |
46.1 |
Medium |
|
8:00 |
EUR |
Euro-Zone PMI Manufacturing (OCT A) |
46.5 |
46.1 |
Medium |
|
8:00 |
EUR |
Euro-Zone PMI Composite (OCT A) |
46.5 |
46.1 |
High |
|
8:00 |
EUR |
Italian Consumer Confidence Ind. sa (OCT) |
86.4 |
86.2 |
Low |
|
9:00 |
EUR |
Eurozone Government Debt (2Q) |
- |
- |
Low |
|
10:00 |
GBP |
CBI Trends Selling Prices (OCT) |
6 |
3 |
Low |
|
10:00 |
GBP |
CBI Trends Total Orders (OCT) |
-6 |
-8 |
Low |
|
10:00 |
GBP |
CBI Business Optimism (OCT) |
-2 |
-6 |
Low |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.2881 |
1.3005 |
|
GBPUSD |
1.5903 |
1.6013 |
— 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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This article (FOREX – Euro at Risk as PMIs Stir Rate Cut Bets, Aussie Outperforms) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.