All eyes are on the Euro as a round of critical economic releases sets the stage for the ECB
monetary policy announcement later in the week. First, the final
revision of November’s Eurozone Composite PMI is expected to confirm manufacturing- and service-sector growth slowed
for a second consecutive month, yielding the weakest performance since
August. Next, a second look at third-quarter Eurozone GDP is forecast to maintain that output grew 0.1 percent, a slowdown
compared with the 0.3 percent increase recorded in the three months
through June. Soft outcomes are likely to stoke speculation about
further easing after last month’s unexpected ECB rate cut, weighing on
the single currency.Later in the day, the spotlight turns to the US economic calendar. November’s ISM Non-Manufacturing Composite gauge and the ADP Employment measure for the same period are on tap. The former is expected to show a
slight slowdown in service-sector activity while the latter suggests
private-sector hiring accelerated from the prior month. The Federal Reserve Beige Book survey of regional economic conditions is likewise due to be released.
On balance, traders will look to the aggregate tone of these releases to
shape speculation about the timing of the Fed’s first move to “taper”
QE3 asset purchases, with a broadly positive tone likely to boost the US Dollar (and vice versa).
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