Markets Steady, Euro Gains on Prettier Picture

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Markets Steady, Euro Gains on Prettier Picture

NOVEMBER 06, 2019

The U.S. Dollar kept quiet with global equity markets also staying attentive to any clarification about plans to sign a Phase One agreement deal with China over trade.

Overview

As optimistic as the tone may have been last week, this one is characterized by confusion over new demands and details within the framework that could delay any beneficial effect from ratifying it. Not much will change until there are details that can make investors feel confident.

As far as economic indicators go, the dollar yesterday found some fundamental merit as the ISM Non-Manufacturing gauge came in much better than expected at an expansion reading of 54.7 over the 53.5 estimate. The improvement is important since the September reading was so poor it prompted a sell-off on recessionary sign fears. We shall see if anything changes that can shake markets from the dullness it is currently experiencing.

What to Watch Today…

  • No major events scheduled for today

Complete Economic Calendar can be found here.

EUR

The Euro is having a tough week, but it is trying to bounce back after having declined by almost a full 1.0% in the past two days. Although underwhelming data points across various indicators have aided in the shared currency’s depreciation, any official date regarding a deal between China and the U.S., however partial, will boost its sales.

One good thing to point out is that German Factory Orders did increase by 1.3% over just 0.1% forecast and all other Purchasing Managers Indices (PMIs) in Italy and France met or slightly exceeded expectations in an earlier release. Expect swings to continue, but we are believers of Euro rising as we close 2019.

GBP

Sterling is unmoved as most other counterparts are at the moment, but statements from the Bank of England tomorrow are likely to spark some action. The U.K. had been preparing for a no-deal scenario and now the Bank must address where it believes things go from here now that a delay to the Brexit has been exercised. Mark Carney is set to continue being head of the BOE as the country navigates the seas of uncertainty heading towards a general election.

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