Eur/usd - page 55
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French PMIs disappoint – EUR/USD slides
Markit reported its preliminary purchasing managers’ indices for France, Europe’s second largest economy. Manufacturing PMI fell 47.1 points, while in the services sector, the indicator fell to 47.4. Manufacturing PMI was expected to advance from 48.4 to 49.1 points. Services PMI carried expectations of a move from 48 to 48.9 points. The 50 point mark separates contraction from growth.
EUR/USD traded just above 1.3750 before the publication, after steady trading in the Asian session. The pair made a quick drop to 1.3735 before bouncing back.
The release for France will be followed by the German numbers and later by the all-European numbers. There are market moving German surveys this week, but the Fed will probably steal the show with the decision on whether or not to taper.
Support is at 1.3710 and resistance awaits at 1.38.
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Euro zone business recovery ends year on a high - PMI
The fragile recovery in the euro zone's private sector is ending the year on a high as new orders flood in, but the chasm between the bloc's two biggest economies has widened, surveys showed on Monday.
Markit's Flash Eurozone Composite Purchasing Managers' Index (PMI), which gauges business activity across thousands of companies large and small, rose to 52.1 in December from 51.7 last month.
It was the second-highest reading since mid-2011 and beat the median forecast in a Reuters poll for 51.9. The index has been above the 50 mark that denotes growth for all the second half.
"It's really encouraging to see the increase in the overall rate of growth. It's a reassuring signal that the recovery is still on track. We are not losing momentum," said Chris Williamson, chief economist at Markit.
"The concern is that the recovery is lopsided."
Once again the surveys highlighted a diverging path between the bloc's two biggest economies of Germany and France.
Earlier manufacturing data from Germany showed factories had their best month since June 2011, but activity among French firms sank to a seven-month low.
Still, Williamson said the data suggested the bloc's economy as a whole, which escaped from its longest-ever recession earlier this year, would grow around 0.2 percent this quarter, in line with a Reuters poll published last week.
New orders rose for the fifth month - the sub-index rose to 52.2 from 51.8 in November - suggesting the recovery should continue into 2014.
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Poland's Core Inflation Eases To Five-Month Low
Poland's core inflation slowed notably in November, and hit the lowest level in five months, data released by the Polish National Bank revealed Monday.
Core consumer prices, excluding food and energy, increased 1.1 percent in November from the same month of last year, following a 1.4 percent rise in October. The growth rate was the lowest since June, when prices advanced 0.9 percent.
Month-on-month, core consumer prices edged down 0.2 percent in November, reversing the previous month's 0.4 percent increase. The monthly outcome matched expectations.
In November, the headline inflation was 0.6 percent, down from October's figure of 0.8 percent. Sequentially, headline consumer prices dropped 0.2 percent in November, after rising 0.2 percent a month earlier.
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Sweden's Central Bank Cuts Repo Rate To 0.75%
Sweden's central bank on Tuesday decided to lower the key interest rate by a quarter-point, saying that inflation has been lower than expected.
To contribute to inflation rising towards 2 percent, the Executive Board of the Riksbank has decided to cut the repo rate by 25 basis points to 0.75 percent, and to make a downward adjustment in the repo-rate path for the entire forecast period, the central bank said in a statement.
Inflation has been unexpectedly low and, despite the recovery, inflationary pressures over the coming year are expected to be much lower than in the most recent forecast in October, the Board said.
Under the new repo rate path, slow increases in the rate are not expected to begin until the start of 2015.
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European shares dip, dollar steady as Fed meeting nears
European shares and bonds got off to a weak start and the dollar hovered cautiously on Tuesday as the Federal Reserve prepared for a two-day meeting where it may start to wind down its stimulus program.
A majority of economists polled by Reuters still expect the Fed to wait until March before it starts to scale back its $85-billion-a-month bond-buying program. But recent data have steadily shortened the odds on a move in January, or even this week.
"Although we have heavier odds pinned on the tapering being announced in January, we think the economic case has already been made for pulling the trigger," analysts at Societe Generale wrote in a note.
"The only reason to delay would be to give the FOMC the opportunity to strongly signal its intent to taper in January. In either case - actual taper or signal of impending taper - we expect the 10-year U.S. Treasury yield to test 2.9 percent."
Treasuries were steady at 2.8683 percent in early European trading. They had inched up on Monday after solid U.S. manufacturing figures, but European government bonds started on the back foot.
European share markets also got off to a weak start. Declines of 0.5, 0.4 and 1 percent on London's FTSE .FTSE, Paris's CAC 40 .FCHI and Frankfurt's Dax .GDAXI took back much of the gains they had made on Monday and bucked earlier rises in Asia. .T
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Decline In Eurozone Construction Output Worsens In October
Eurozone's construction output fell at a faster rate in October than in the previous month, data released by Eurostat revealed on Wednesday.
Construction production dropped 2.4 percent year-on-year, after a 0.7 fall in September that was revised from 0.2 percent. The decline was the biggest since May, when output decreased 3.7 percent.
Among the EU members, construction output fell in six during October, was stable in Germany and rose in seven. The biggest decline was seen in Portugal, while the largest increase was registered in Slovenia.
Month-on-month, construction output declined 1.2 percent from September, when it dropped 0.5 percent. Output decreased for the second straight month. The monthly decline for September was revised from 1.3 percent.
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Swiss ZEW Investor Confidence At 3&1/2-year High
Swiss economic expectations improved to their best level in three-and-a-half years in December, survey data released by the Mannheim-based Centre for European Economic Research (ZEW) and Credit Suisse showed on Wednesday.
The ZEW-CS-Indicator of economic expectations rose 7.8 points to 39.4 in December, which was the highest score since May 2010 during the early stages of the European crisis.
The index reflecting the current economic situation in Switzerland added 14.8 points to reach 48.5, rebounding from a setback in the previous month.
Despite the optimism regarding the Swiss economy, the surveyed analysts' expectations regarding the Swiss stock market were rather pessimistic. The indicator which reflects experts' expectations of the development of the Swiss Market Index (SMI) declined sharply to 38.6. from 62.0 points.
Stock market expectations are likely to be dampened by increasing indications of an earlier-than-expected tapering by the US Federal Reserve, ZEW said. If securities markets are still too fragile and prices drop, this will also impact on Swiss and European stock markets, the think-tank added.
The ZEW-CS Indicator is based on a survey among financial market experts and their expectations regarding the economic development in Switzerland on a six-month time horizon.
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Germany's Real Earnings Fall In Q3
German real earnings declined in the third quarter from last year, figures published by the Federal Statistical Office showed Thursday.
Earnings fell 0.3 percent on average in the third quarter from the same period last year. In nominal terms, however, earnings rose 1.3 percent.
Separately, the statistical agency reported that Germany's public debt, including extra budgets, declined 1.9 percent year-on-year in the third quarter. Compared with the second quarter, debt fell 1.2 percent.
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Italy's Retail Sales Fall For Second Month
Italy's retail sales fell for the second straight month in October, data from the statistical office Istat showed Friday.
Sales were down 0.1 percent from a month ago, when it was forecast to remain flat. The decline follows a 0.3 percent drop seen in September.
Retail sales dropped 1.6 percent year-on-year in October. But the rate of decline was slower than the 2.8 percent fall posted prior month.
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EUR/USD turns slightly higher in light trade
The euro turned slightly higher against the U.S. dollar in light trade on Friday, as upbeat U.S. economic growth data supported risk-related assets, while the Federal Reserve's decision to begin tapering its stimulus program next month continued to support the greenback.
EUR/USD hit 1.3675 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.3671, edging up 0.07%.
The pair was likely to find support at 1.3544, the low of December 5 and resistance at 1.3694, Thursday's high.
Official data showed that U.S. gross domestic product expanded by 4.1% in the third quarter, above initial estimates for 3.6% growth.
The dollar remained supported after the Fed announced Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. Outgoing Fed Chairman Ben Bernanke said the economy was continuing to make progress.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
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