The Euro may pull back as soft PMI data boosts ECB rate cut bets while the Pound may decline as Chancellor Osborne cuts the growth and budget outlook.

Talking Points

• Euro May Pull Back as Soft PMI Data Boosts Dovish ECB Expectations

• Pound at Risk if UK Chancellor Osborne Cuts Growth, Budget Outlook

• Dollar May Rebound if US ADP, Services ISM Reports Underperforms

The final revision of November’s Eurozone PMI Composite reading is in focus on the economic calendar in European hours. A confirmation of flash estimates would put the reading at 45.8, a hair above the 40-month low at 45.7 recorded in October. The outcome may help shift traders’ attention away from Eurozone debt crisis and toward the deepening slump in regional economic growth, weighing on the Euro amid swelling expectations for a dovish turn in ECB rhetoric as the central bank delivers a policy announcement Thursday.

Meanwhile, UK Chancellor of the Exchequer George Osborne will make his Autumn Statement in the House of Commons, where he is expected to present updated economic and fiscal projections for the year head. Markets are expecting downgrades on both accounts, which may weigh on the British Pound. Separately, UK Services PMI is expected to show non-manufacturing sector activity narrowly improved in November after yielding the weakest expansion in close to two years in October.

Later in the day, the spotlight turns to the US data docket, there November’s ADP Employment report and ISM Non-manufacturing Composite figure will be looked upon to set the tone for Friday’s much-anticipated Nonfarm Payrolls print. Expectations call for relatively benign moderation on both fronts but the recent disappointing trend in US news-flow compared with economists’ forecasts warns the outcomes may underperform, weighing on risk appetite. This may boost the US Dollar as safe-haven capital flows buoy the benchmark currency anew. With that said, S&P 500 futures are pointing firmly higher, arguing for a risk-on bias heading into European hours

Asia Session: What Happened

Euro Session: What to Expect