Forex Analysis: Euro Looks to EU Budget Talks, PMI Data for Direction

RELATED QUOTES

SymbolPriceChange
EURUSD=X1.0769+0.0001

The Euro may be in for an active session as traders size up November’s set of flash PMI figures while EU leaders gather to hash out the region’s seven-year budget.

Talking Points

  • Euro May See Selling Pressure if PMI Data Boosts ECB Rate Cut Bets
  • EU Budget Deal May Prove Harder to Achieve Amid Euro Debt Crisis

The preliminary set of November’s Eurozone PMI figures headlines the economic calendar in European hours. Expectations suggest the region-wide composite gauge will remain unchanged 45.7, showing manufacturing- and service-sector activity contracted at the fastest pace since June 2009 for a second consecutive month.

A print in line with expectations is unlikely to yield a strong reaction from the Euro in and of itself. Indeed, traders have had ample opportunity to price in the depth of the Eurozone recession as it stands at the moment. A disappointing outcome may weigh on the single currency however as compounding malaise boosts expectations of additional ECB easing.

Meanwhile, EU leaders will meet to hammer out the region’s seven-year budget. Familiar issues have resurfaced, with France arguing against proposed cuts to its cherished Common Agricultural Policy (CAP) that heavily subsidizes the country’s farmers while the UK threatens a veto if spending is not reduced to mirror austerity at the member-state level.

While this is a familiar battle that has emerged time and again in EU budget negotiations only to end in compromise, the backdrop of the Eurozone debt crisis may make for a more heated outing this time. EU coffers are a major source of cash for those “PIIGS” countries already running bailout programs.

A final deal is not due until tomorrow but traders will keep a close eye on sideline commentary to gauge the tone of the proceedings. Signs of deadlock may spark risk aversion, boosting the safe-haven US Dollar.

Asia Session: What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

21:45

NZD

Net Migration s.a. (NOV 16)

260

-

140 (R+)

1:45

CNY

HSBC Flash Manufacturing PMI (NOV)

50.4

-

49.5

5:00

JPY

Supermarket Sales (YoY) (OCT)

-4.0%

-

-2.0%

7:30

JPY

Bank of Japan Releases Monthly Report

-

-

-

Euro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

-

EUR

EU Leaders Hold Summit on Seven-Year Budget

-

-

High

8:00

EUR

French PMI Services (NOV P)

45.0

44.6

Low

8:00

EUR

French PMI Manufacturing (NOV P)

44.0

43.7

Low

8:30

EUR

German PMI Manufacturing (NOV A)

46.0

46

High

8:30

EUR

German PMI Services (NOV A)

48.3

48.4

High

9:00

EUR

Euro-Zone PMI Composite (NOV A)

45.7

45.7

High

9:00

EUR

Euro-Zone PMI Services (NOV A)

46.0

46

High

9:00

EUR

Euro-Zone PMI Manufacturing (NOV A)

45.6

45.4

High

11:00

GBP

CBI Trends Total Orders (NOV)

-20

-23

Medium

11:00

GBP

CBI Trends Selling Prices (NOV)

7

7

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.2766

1.2896

GBPUSD

1.5905

1.6003

--- 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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3629-0.0003-0.02%
    USDSGD=X
    1.4678-0.0001-0.01%
    EURSGD=X
    2.0211-0.00010.00%
    GBPSGD=X
    87.8308+0.019+0.02%
    SGDJPY=X
    5.6879+0.0009+0.02%
    SGDHKD=X
    2.6937+0.0004+0.02%
    SGDMYR=X
    9,510.7539+1.5039+0.02%
    SGDIDR=X
    4.5473+0.0004+0.01%
    SGDCNY=X
    1.0359-0.0004-0.04%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,203.60-4.60-0.38%
    GCM15.CMX
    16.94-0.12-0.70%
    SIK15.CMX
    68.90+3.40+5.19%
    ^XAU
    2.750.00-0.07%
    HGK15.CMX
    49.55+1.95+4.10%
    CLK15.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.33-0.05
    ^FVX
    1.87-0.07
    ^TNX
    2.47-0.07
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.188+0.005+2.73%
    A50.SI
    0.2850.0000.00%
    5WA.SI
    0.915-0.005-0.54%
    N21.SI
    0.785+0.020+2.61%
    Y92.SI
    0.415-0.010-2.35%
    E5H.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.19+0.05+35.71%
    5RC.SI
    0.42+0.09+27.27%
    5UL.SI
    0.42+0.07+21.74%
    5DS.SI
    0.152+0.016+11.76%
    K2P.SI
    0.127+0.011+9.48%
    V69.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.141-0.029-17.06%
    40B.SI
    0.092-0.013-12.38%
    A18.SI
    0.13-0.02-12.16%
    L10.SI
    0.495-0.055-10.00%
    TI6.SI
    0.112-0.011-8.94%
    B32.SI