Euro dollar is moving into a lower range. Italian, Spanish and French bond yields are rising to dangerous levels once again, In Germany, economic sentiment digs deeper in negative ground. At least Q3 GDP levels were OK for now. Many US figures are awaiting us on this busy day.
Here’s a quick update on technicals, fundamentals and what’s going on in the markets.
- Asian session: A quiet session saw EUR/USD capped under 1.3650. The fall began in the European session..
- Current range: 1.3480 to 1.3550.
- Further levels in both directions: Below 1.3480, 1.3360, 1.3250 and 1.3145.
- Above: 1.3550, 1.3650, 1.3725, 1.38, 1.3838, 1.39, 1.3950.
- 1.3650 made a complete switch from support to resistance after yesterday’s collapse. Further important resistance is at 1.3838.
- 1.3480 was the trough of the current move down, on the road to 1.3145.
Euro/Dollar in lower ground- click on the graph to enlarge.
- 6:30 French GDP. Exp. +0.3%. Actual +0.4%. This came on the back of contraction in Q2.
- 7:00 German GDP. Exp. +0.5%. Actual +0.5%. This came on top of an upwards revision of Q2: +0.3% instead of +0.1%.
- 7:45 French Non-Farm Payrolls. Exp. +0.3%. Actual 0%.
- 10:00 Euro-zone GDP. Exp. +0.2%. Actual +0.2%.
- 10:00 German ZEW Economic Sentiment. Exp. -51.8 points. Actual -55.2 points.
- 10:00 Euro-zone ZEW Economic Sentiment. Exp. -52.7, Actual -59.1 points.
- 10:00 Euro-zone Trade Balance. Exp. -0.8 billion. Actual +2.1 billion.
- 13:00 US FOMC member Charles Evans talks.
- 13:30 US Retail Sales. Exp. +0.3%. Core exp. +0.2%.
- 13:30 US PPI. Exp. -0.1%. Core PPI exp. +0.1%.
- 13:30 US Empire State Manufacturing. Exp. -2 points.
- 14:00 US Business Inventories. Exp. +0.2%.
- 17:30 US FOMC member Richard Fisher talks.
* All times are GMT.
For more events later in the week, see the Euro to dollar forecast
- Spanish trouble: Spanish yields are rising to August’s levels, with 2 year yields at record high. The spread between Spanish bonds and German bunds is at a record 450 basis points (4.5%). Spain paid a dear price in a fresh bond auction today and settled for a lower sum than anticipated. Spaniards will go to the polls on Sunday. Is the ECB letting yields rise and intervening in the elections?
- Yields leap: Italian yields are above 7% once again, even though Berlusconi resigned. Belgium had a fresh auction and paid a higher prices once again. French yields are also on the rise, and they are now double the German yields.
- Economic Sentiment lower: The ZEW indicator fell for the 9th month in a row. This is a highly regarded indicator, and its negative result means significant pessimism.
- No recession yet: The euro-zone didn’t enter a recession in Q3 according to the recent numbers, that came in line with expectations. It’s only important to note that the French economy contracted in Q2, contrary to no change initially reported.
- Encouraging US figures: Recent data that came out of the US was encouraging: another small drop in jobless claims, a smaller trade deficit and a drop in import prices all help the US economy. Retail sales are important to watch. They exceeded expectations last month. Will this happen again?
- Political deadlock in the US: The debt ceiling is slowly creeping back. The November 23rd deadline for reaching a deal on long term debt reduction is getting closer, but the politicians are getting further away from each other.