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

RELATED QUOTES

SymbolPriceChange
EURUSD=X1.06320.00

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 MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
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    40F.SI
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    C31.SI
    0.1720.0000.00%
    N21.SI
    2.60-0.01-0.38%
    MC0.SI
    0.625-0.005-0.79%
    Y45.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.113+0.011+10.78%
    40F.SI
    0.235+0.010+4.44%
    1C3.SI
    0.142+0.004+2.90%
    5UE.SI
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    AWE.SI
    0.74+0.02+2.78%
    AVM.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.355-0.035-8.97%
    5DP.SI
    0.205-0.020-8.89%
    I49.SI
    0.195-0.015-7.14%
    BCV.SI
    0.183-0.008-4.19%
    42W.SI
    1.735-0.050-2.80%
    U77.SI

Market Data

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    USDSGD=X
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    EURSGD=X
    1.7523+0.0006+0.03%
    GBPSGD=X
    80.2990+0.146+0.18%
    SGDJPY=X
    5.4282+0.0022+0.04%
    SGDHKD=X
    3.1165-0.0187-0.60%
    SGDMYR=X
    9,391.7949+22.9902+0.25%
    SGDIDR=X
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    SGDCNY=X
    1.0726-0.0004-0.04%
    AUDSGD=X
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