As the North American session begins, US futures for US stock indexes are trading higher after last week's mixed results. US yields are starting lower by around 2 to 3 basis points after the 10 year yield moved up by 25 basis points last week. The USD is mixed to start the new week with the green back higher by 0.27% against the JPY, but down -0.22% against the GBP. The DXY is trading above and below 0.0% on the day.
In the European market, manufacturing PMI and Flash services PMI came in mixed with Manufacturing indices missing expectations but Services indices beating expectations.
- French Flash Manufacturing PMI (EUR): Actual: 41.9 | Weather: 43.2 | Before: 43.1 | RECOMMENDATION
- PMI French Flash Services (EUR): Actual: 48.2 | Weather: 46.9 | Before: 46.9 | LIFE
- German Flash Manufacturing PMI (EUR): Actual: 42.5 | Weather: 43.1 | Before: 43.0 | RECOMMENDATION
- PMI German Flash Services (EUR): Actual: 51.0 | Weather: 49.5 | Before: 49.3 | LIFE
- Manufacturing Flash PMI (GBP): Actual: 47.3 | Weather: 48.4 | Previous: 48.0 | RECOMMENDATION
- PMI Flash Services (GBP): Actual: 51.4 | Weather: 50.9 | Before: 50.8 | LIFE
On the economic calendar US flash PMI will be released along with Canada Housing starts and NY manufacturing data for the month of December.
- House starts, annual (Canada, November): Rating: 245.1k | Ahead: 240.8k
- NY Fed Manufacturing (US, December): Rating: 10.0 | Before: 31.2
- S&P Global Manufacturing PMI Flash (US, December): Rating: 49.8 | Leading: 49.7
- S&P Global Services PMI Flash (US, December): Rating: 55.7 | Ahead: 56.1
- Flash PMI Composite S&P Global (US, December): Assessment : — | Leading: 54.9
This week, the Fed will announce its rate decision on Wednesday with an expected 25 basis point cut (the third in a row). Over the weekend WSJ TImiraos said that although “investors are expecting a third rate cut in a row”, Fed officials are also ready to slow or even stop, lowering rates afterwards.
The ECB cut rates last week by 25 bps. Today ECBs Lagarde said “The ECB is moving through the monetary policy cycle and the darkest days are not behind us. However, she also said more rate cuts are to come and the path forward is clear. The EURUSD is trading little changed as today's high stops near the MA resistance on the upside holding again at the 200 hour MA (green line on the chart to low).
The Bank of England will meet this week with no change expected on Thursday. The GBPUSD is higher today (GBP higher / USD lower).
The Bank of Japan is also meeting and no change is expected. The run to the upside continues today for that currency pair (USD higher and JPY lower).
Below is a video, describing the technical methods for the three main currency pairs – the EURUSD, GBPUSD and USDJPY.
