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The Euro

Overlay of EUR Pairs: 1-Hour Forex Chart
Overlay of EUR Pairs: 1-Hour Forex Chart
EUR Weekly Performance from MarketMilk
EUR Weekly Performance from MarketMilk

European Headlines and Economic data


Flash Eurozone PMI signals steep downturn in November amid COVID-19 lockdowns

Flash Eurozone PMI falls to lowest since May, adding to signs of fourth quarter downturn

Job losses continue, though rate of decline holds steady

Selling prices fall, but manufacturers see upward pressure on input costs


German PMI drops to five-month low in November at 52.0 (Oct.: 55.0)  due to tightening of COVID-19 restrictions, but economy remains buoyed by manufacturing

Sharp decline in French business activity amid fresh COVID-19 lockdown  – Flash France Services Activity Index at 38.0 in
November (46.5 in October), 6-month low


German GDP rose by 8.5% in the third quarter of 2020 compared with the second quarter of 2020 after adjustment for price, seasonal and calendar variations. GDP was -3.9% on the same quarter a year earlier (price-adjusted)

ECB should weigh taking longer to hit inflation target: Schnabel – “The ECB targets inflation at just below 2% over the medium term, an undefined concept that has changed over time and is now understood to mean longer than the ECB’s two-year forecast horizon.”

Ifo institute expects German economy to shrink in fourth quarter – “Ifo’s business climate index fell to 90.7 from a downwardly revised 92.5 in October. The two monthly drops in a row followed five months of rises.”

Macron says worst of virus second wave over, lockdown to ease – “Positive trends including a decline in hospitalisations for COVID-19 infections, combined with pressure from business lobbies who say they are facing financial ruin, have led to calls to start loosening the lockdown as soon as possible.”


ECB’s de Guindos says Yellen’s appointment good for global economy

EU prepared for no-deal Brexit, says Ursula von der Leyen

Germany plans Christmas curbs as COVID-19 deaths hit record

EU chief says no-deal still possible despite progress in UK trade talks


Second COVID-19 wave further weakens Germany’s consumer climate: GfK study

Annual growth rate of broad monetary aggregate M3 stood at 10.5% in October 2020, after 10.4% in September 2020; Annual growth rate of adjusted loans to non-financial corporations decreased to 6.8% in October from 7.1% in September

Fearing cost of complacency, ECB lays ground for more stimulus

ECB’S Holzmann sees sustainable recovery from mid 2021 – Boersen-Kurier


EU plays down Michel Barnier talks with bloc’s fishing ministers

Germany plans almost 180B euros of new debt in 2021 – Berlin extends aid measures to mitigate impact of the COVID-19 pandemic on Europe’s biggest economy

In Q3 2020, French producer prices of services increased by 0.5% vs. +0.1% in Q2 2020. – “Those for services sold to home businesses were back on the rise (+0.3% after a stability), as well as prices of services sold to households in France (+1.6% after –0.1%), while those of exported services fell back (–0.4% after +1.2%). Year on year, producer prices of services slowed down again (+0.5% after +0.8% and +1.6%).”

French Manufacturing industry turnover continued to increase in September 2020 (+2.0%)

ECB must enable governments to spend their way out of pandemic

German Import prices fell -3.9% y/y in October; +0.3% m/m – ” In September 2020 and in August 2020 the annual rates of change were -4.3% and -4.0%, respectively. From September 2020 to October 2020 the index rose by 0.3%.”

The Swiss Franc

Overlay of CHF Pairs: 1-Hour Forex Chart
Overlay of CHF Pairs: 1-Hour Forex Chart
CHF Weekly Performance from MarketMilk
CHF Weekly Performance from MarketMilk

Swiss Headlines and Economic data

There were no major news or data points from Switzerland this week, and with the Swiss franc closing mixed and net negative, it’s likely price action was mainly dominated by global risk sentiment.

Risk sentiment was leaning positive this week, kicked off by another round of positive covid vaccine / therapy news (Oxford-AstraZeneca Covid vaccine shows an average 70% effectiveness in preventing the virusFDA authorizes Regeneron’s Covid treatment for emergency use).

We also saw got news that the Trump team gave the go ahead to the GSA to begin to transition administration to the Biden team, reducing geopolitical uncertainty in the U.S.

Finally, rumors came out on Monday that President-elect Biden would tap former Fed head Yellen for Treasury, leading traders to price in a market friendly administration in 2021.

These were the likely drivers for positive global risk sentiment through Wednesday, and likely a contributor to the Swiss franc’s weakness for most of the week.

On Thursday, the franc recovered a bit, again with no major news or data drivers from Europe or even the U.S. It’s possible that the bounce was technically driven, and/or some negative risk sentiment may have played a role, possibly a move off of the continued difficulty that negotiators were having on the Brexit deal.

Some positive global risk sentiment returned on Friday, likely a reaction to news from China that industrial profits grew at the quickest monthly pace since early 2017.