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

RELATED QUOTES

SymbolPriceChange
EURUSD=X1.3831+0.0013

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
    1.2580+0.0026+0.21%
    USDSGD=X
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    EURSGD=X
    2.1134+0.0068+0.32%
    GBPSGD=X
    81.3537-0.3202-0.39%
    SGDJPY=X
    6.1631-0.0126-0.20%
    SGDHKD=X
    2.5985-0.0027-0.10%
    SGDMYR=X
    9,256.3887-43.2959-0.47%
    SGDIDR=X
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    SGDCNY=X
    1.1650-0.0009-0.08%
    AUDSGD=X
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    Commodities
    NamePriceChange% Chg
    1,289.40+4.80+0.37%
    GCM14.CMX
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    SIK14.CMX
    92.37-0.50-0.54%
    ^XAU
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    HGK14.CMX
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    CLM14.NYM
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    ^FVX
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MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.123+0.001+0.82%
    B22.SI
    0.15+0.008+5.63%
    545.SI
    0.635+0.040+6.72%
    5WH.SI
    0.615+0.005+0.82%
    E5H.SI
    1.355+0.005+0.37%
    G13.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    20.00+4.200+26.58%
    K6S.SI
    1.215+0.190+18.54%
    S53.SI
    0.415+0.045+12.16%
    570.SI
    1.345+0.130+10.70%
    5DA.SI
    0.154+0.014+10.00%
    5GD.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.053-0.059-52.68%
    5TF.SI
    1.62-0.520-24.30%
    N02.SI
    0.20-0.020-9.09%
    E94.SI
    0.179-0.013-6.77%
    567.SI
    0.30-0.020-6.25%
    508.SI