It’s time for another round of flash PMI readings from the eurozone while the franc could take cues from the SNB decision.
Here’s what traders are expecting from these economic events.
Eurozone flash PMIs (Dec. 16)
- French services PMI to tick higher from 38.8 to 39.1
- French manufacturing PMI to rise from 49.6 to 49.7
- German manufacturing PMI to dip from 57.8 to 56.2
- German flash services PMI to fall from 46.0 to 44.1
- Eurozone manufacturing PMI to drop from 53.8 to 53.0
- Eurozone services PMI to slide from 41.7 to 41.1
- Readings above 50.0 indicate industry expansion, below 50.0 reflects contraction
Mid-tier eurozone releases
- Eurozone industrial production (Dec. 14, 11:00 am GMT) to show 1.8% rebound after earlier 0.4% drop
- German Ifo business climate index (Dec. 17, 10:00 am GMT) to fall from 90.7 to 90.2
SNB policy decision
- No actual changes to -0.75% deposit rate expected
- Jawboning or threats to intervene in the forex market could still weigh on the Swiss currency
Overall market sentiment
- These lower-yielding European currencies tend to benefit from risk-off flows
- Increased focus on vaccine distribution could be positive for risk taking while doubts about stimulus packages could keep risk aversion in play
- Brexit developments (or lack thereof) could also impact market sentiment and demand for European currencies
Technical Snapshot
- Moving averages suggest that the euro is bearish against the Aussie and Kiwi
- EUR/USD appears to be the most bullish of the bunch, followed by EUR/JPY
- However, Stochastic shows that EUR/JPY and EUR/USD are overbought
- EUR/GBP is also looking bearish while EUR/AUD, EUR/CAD, and EUR/CHF are bullish
- As for franc pairs, the same oscillator suggests that AUD/CHF and CHF/JPY are overbought
- Stochastic also indicates that GBP/CHF and USD/CHF could be in for gains
Missed last week’s price action? Read EUR & CHF’s price recap for Nov. 30 – Dec. 4!
