All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
Euro zone economy speeds down
In October, euro zone business surge dived to a two-year minimum because escalating trade clashes as well as levies along with soaring political uncertainty, affected exports and also optimism. That’s what a poll disclosed on Tuesday.
While the poll along with official figures revealed that the deceleration is quite widespread, but the clouds over the euro zone aren’t as gloomy as recently perceived by traders.
Any upbeat signs are going to be welcomed by policymakers at the ECB because they consider stopping their 2.6 trillion euro asset buying program by the end of 2018, closing one of the key sources of stimulus to the EU economy.
In October, the Euro Zone Composite Final Purchasing Managers' Index went down to about 53.1 from September's reading of 54.1. That’s the lowest reading since September 2016. However, it appeared to be above a 52.7% flash estimate and also higher than the 50 mark separating contraction from growth.
Besides this, official figures disclosed that in Germany industrial orders surged by 0.3% in September, although a Reuters survey foresaw a 0.6% dive, suggesting the EU’s number one economy concluded the third quarter on a firm footing.
The final German services PMI was updated upwards to 54.7 from a preliminary outcome of 53.6, which appears to be one of the greatest upward updates in the poll’s history.
In addition to this, activity in France speeded up because companies increased hiring after a soar in new business and the expansion of Spain's service sector at its fastest tempo since June also backed by surge in new business, as earlier PMIs disclosed.
As follows from October's PMI data, the vast majority of the key euro zone economies are going to perform a bit better in the fourth quarter than in the third quarter.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
The market sentiment deteriorated because of the election uncertainty and worries about rising virus cases all over the world. Let's make some analysis!
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.