Main event will be euro Flash PMI for October, which provides country details forGermany and France. PMI has been on a declining trend since January and so far hasshown no signs of stabilisation. We look for a slightly lower PMI for bothmanufacturing and service. The slowdown has been centred in the manufacturingsector but some spill-over effect on the service sector is expected. Europeancompanies have hit the brakes this year, as inventories were built early in the year andthe Ukraine crisis caused new uncertainty. This shock is still working its way throughthe economy. On a positive note, consumers have not yet scaled back spending. Weexpect the manufacturing sector to recover in early 2015, as inventories have been cutback and consumption is underpinned by the decline in oil prices.
The US releases PMI from Markit, which is expected to have levelled off slightlyfrom 57.5 to 57. It is still a high level, though, pointing to decent growth in the USeconomy. Initial jobless claims are also due for release. They fell to a new cycle lowat 264k last week and are expected to rebound slightly to around 280k. Overall theypoint to a robust labour market.
Several important events in Scandinavia today, most notably Norges Bank’s ratedecision and Swedish unemployment data.
Read the full report: FX Daily