Economic Data and Opinion Polls Put the EUR and the GBP in Focus

Daily Update - 5th December 2019

Yesterday’s Market

• USD: ISM Non-Manufacturing PMI

• CAD: BoC Interest Rate Decision

Yesterday’s Explained

US Services PMI November Preview: Manufacturing indicates lower. Services PMI forecast to dip marginally in November. Manufacturing PMI dropped unexpectedly last month after rising in October. US-China trade and President Trump roil markets.

BOC left the policy rate unchanged at 1.75% in December. The accompanying statement turned more hawkish than October. Despite ongoing trade war uncertainty, policymakers remained upbeat about the domestic economic growth. They also acknowledged that the global economy has stabilised. It now appears that the central bank would prefer to leave the policy rate on hold for an extended period of time. The possibility of a rate cut hinges on unexpectedly severe deteriorated in economic developments at home and across the globe.

 

Today’s Market

• EUR: Gross Domestic Product ( Q3 )

Today’s Focus

For the EUR, it’s a relatively busy day ahead on the economic calendar. Key stats include German factory orders figures for October ahead of the European open. Later in the morning, the Eurozone’s finalized 3rd quarter GDP numbers and October retail sales figures will also be in focus. Barring deviation from 2nd estimates, we would expect factory order and retail sales figures to have the greatest impact. The Eurozone economy continues to rely on consumer spending, making today’s figures all the more important. Outside of the stats, with a week to go before the UK General Election, influence on the EUR will likely continue to rise. The EUR should show little response to the polls, however, should the Tories continue to stay out ahead.

For the Pound, it’s a quiet day on the data front. There are no material stats due out of the UK to provide the Pound with direction. The lack of stats will leave the Pound in the hands of the opinion polls and election predictions, as the 7-day countdown begins.

Across the Pond, it’s a relatively busy day on the economic calendar. October trade data and factory order figures are due out, along with the weekly jobless claims numbers.Barring any material jump in the initial jobless claims, we would expect the factory order numbers to have the greatest influence. On the trade front, any widening of the trade deficit could spur Trump into Twitter action later in the day.