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

RELATED QUOTES

SymbolPriceChange
EURUSD=X1.1006-0.0007

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
    1.3373+0.0009+0.07%
    USDSGD=X
    1.4719+0.0003+0.02%
    EURSGD=X
    2.0697-0.0046-0.22%
    GBPSGD=X
    90.8659-0.0796-0.09%
    SGDJPY=X
    5.7969-0.0042-0.07%
    SGDHKD=X
    2.6935-0.0019-0.07%
    SGDMYR=X
    9,834.7510-7.0186-0.07%
    SGDIDR=X
    4.6348-0.0033-0.07%
    SGDCNY=X
    1.0468-0.0011-0.11%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,204.00+1.30+0.11%
    GCM15.CMX
    17.03-0.04-0.21%
    SIM15.CMX
    71.25-0.60-0.84%
    ^XAU
    2.81-0.04-1.39%
    HGN15.CMX
    61.30-0.70-1.13%
    CLZ15.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.56+0.05
    ^FVX
    2.21+0.03
    ^TNX
    2.99+0.01
    ^TYX

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.295+0.070+31.11%
    AFC.SI
    0.290.000.00%
    5WA.SI
    0.180.00+2.27%
    5OU.SI
    0.215+0.005+2.38%
    5GB.SI
    0.830.000.00%
    N21.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    1.35+0.35+35.00%
    AYN.SI
    0.295+0.070+31.11%
    AFC.SI
    0.27+0.06+28.57%
    AVX.SI
    0.135+0.016+13.45%
    5IF.SI
    0.62+0.06+11.71%
    AWV.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.18-0.02-10.00%
    PH0.SI
    0.15-0.02-9.09%
    5IA.SI
    0.21-0.02-8.70%
    5G1.SI
    0.20-0.02-6.98%
    B1N.SI
    0.765-0.055-6.71%
    533.SI