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Although mixed at close for the euro, it was arguably a net negative one as traders priced in record cases, extended lockdowns and disappointing economic news from Europe over positive vaccine news.

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


Eurozone manufacturing growth accelerates in final month of 2020 – “Although all three broad market groups recorded an improvement in operating conditions since November, rates of growth were noticeably different. Investment goods producers recorded the strongest improvement, followed by intermediate goods where marked growth was also registered. In contrast, only a marginal strengthening in operating conditions was seen amongst consumer goods producers.”

German manufacturing sector ends 2020 with further strong growth, but supply chain pressures build

French Business conditions improve amid renewed rise in production

Italian Manufacturing conditions improve further in December

Spanish Manufacturing sector returns to growth at end of 2020

ECB Should Weigh Yield-Curve Control, Hernandez de Cos Says – “The experience of these central banks suggests that, if sufficiently credible, yield-curve control allows the central bank to achieve a yield-curve configuration with a lower amount of actual purchases, hence, enhancing efficiency,” said Hernandez de Cos, who is the chief of Spain’s central bank.

Germany to extend curbs amid criticism over vaccine rollout

Scotland orders new lockdown as virus spread accelerates


German retail turnover in November 2020: +1.9% m/m; +5.6% y/y

Spain’s average unemployment rate in 2020 was likely below 16%, official says

German unemployment falls unexpectedly in December – “The labour office said the number of people out of work in Europe’s largest economy fell by 37,000 in seasonally adjusted terms to 2.776 million. A Reuters poll had forecast a rise of 10,000.”

Annual growth rate of broad monetary aggregate M3 in the euro area increased to 11.0% in November 2020 from 10.5% in October


Eurozone private sector contracts again in final month of 2020:

“There were notable country level divergences at the
end of the year. In part driven by Brexit-related stockpiling and higher manufacturing production, Ireland was the best-performing economy followed by Germany, where growth was again underpinned by strong export performance.

In contrast, all other nations registered a contraction, although rates of decline eased noticeably in both France and Spain.  Italy was comfortably the worst performing as service sector activity continued to contract noticeably and more than offset modest growth in manufacturing.”

German business activity falls for third straight month in December

French service sector activity eased to marginal pace in December

Spanish service sector activity and new work continued to decline in December

Industrial producer prices up by 0.4% m/m in both euro area and EU in November 2020

Moderna COVID-19 vaccine approved in Europe, Dutch play catch-up


German manufacturing in November 2020: new orders up 2.3% on the previous month

German construction downturn shows further signs of easing in December

Downturn in eurozone construction continues in December

“The IHS Markit Eurozone Construction Total Activity Index slipped to 45.5 in December from 45.6 in November, signifying a further solid contraction in eurozone construction activity. The latest fall extended the current sequence of decline to ten months, although the rate of reduction remained far softer than at the nadir of the downturn caused by the coronavirus disease 2019 (COVID-19) pandemic in April. Latest data showed a broad-based downturn in output across the three monitored sub-sectors, with the sharpest decline recorded in commercial construction, followed by civil engineering activity. Meanwhile, housing activity fell once again in December.”

Volume of retail trade down by 6.1% m/m in euro area; Down by 5.0% m/m in EU

Euro area annual inflation stable at -0.3% in December 2020


German Exports in November 2020: +2.2% on October 2020

German Production in November 2020: +0.9% on the previous month

Euro area unemployment at 8.3% m/m EU at 7.5% m/m in November 2020

Germany reports record COVID-19 deaths, concerns about new variant grow

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


The Purchasing Managers’ Index (PMI) climbed 2.7 points in December to 58.0 – this is the highest level since September 2018, and the news release correlates with the broad move higher in the Swiss franc against the majors on the session.


The Swiss consumer price index (CPI) fell by 0.1% m/m in December 2020


Turnover in the Swiss retail sector increased by 1% in November

Adjusted for sales days and holidays, the retail sector excluding service stations showed a 2.7% m/m  increase

Retail sales of food, drinks and tobacco registered an increase in nominal turnover of 8.3% (in real terms +7.7%), whereas the non-food sector registered a nominal negative of 1.7% (in real terms -0.4%).

The Swiss franc broadly turned lower during the Thursday session, likely driven by global risk sentiment. It looks like it didn’t take long for traders to shift focus from the disturbing events in Washington, D.C. to positive themes.  This mainly includes the potential for fresh stimulus after the U.S. Congress confirmed Biden election.


According to the SECO surveys, the average unemployment rate for 2020 was 3.1%.