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FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs

Christopher Vecchio

Talking Points

- EURUSD balks at $1.3600 on weaker German labor data.

- Euro-Zone PMI figures a touch softer, signaling “top” in growth.

- See noteworthy events on the global FX economic calendar for the week of September 29 to October 4, 2013.

To keep up with the European data and news as the week goes forward, be sure to sign up for my distribution list.

EURO-ZONE ECONOMIC CALENDAR

FX_Headlines_Euro_Drops_on_Weaker_German_Labor_Market_European_PMIs_body_Picture_1.png, FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs
FX_Headlines_Euro_Drops_on_Weaker_German_Labor_Market_European_PMIs_body_Picture_1.png, FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs

German labor market data surprised lower by a fair margin in September, stirring concerns that regional economic activity may have reached its apex midsummer. Indeed, the slight retracement in individual Euro-Zone countries’ PMI figures points to a “top” in growth having been reached in the near-term, as it appears that a lack of credit growth in the Euro-Zone has become a drag.

This concern dates back to early-August when ECB President Draghi first noted the decline in Euro-Zone excess reserves. As noted several weeks ago, we believe there have been indications that another LTRO may be in the works, which would be EUR-negative similar to December 2011 and February 2012.

Read more: Euro, US Dollar Drop versus Japanese Yen amid Political Déjà Vu

UK ECONOMIC CALENDAR

FX_Headlines_Euro_Drops_on_Weaker_German_Labor_Market_European_PMIs_body_x0000_i1028.png, FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs
FX_Headlines_Euro_Drops_on_Weaker_German_Labor_Market_European_PMIs_body_x0000_i1028.png, FX Headlines: Euro Drops on Weaker German Labor Market, European PMIs

The slowdown in Euro-Zone economic activity midyear has manifested itself in UK economic data, as the September PMI Manufacturing report showed today. A softer than expected print has manufacturing activities near a two-year peak, but slightly off of its yearly high seen midsummer. The UK economy is significantly stronger than where it was just one year ago; and resiliency in data is expected barring a deeper drag in Euro-Zone economic activity.

Read more: Pound Eyes 1.6200 on More Hawkish BoE, Stronger U.K. Recovery

SWISS ECONOMIC CALENDAR

There are no data due for the Swiss Franc on Tuesday, October 1.

Read more: US Dollar Set for Breakout, Risk and Budget Standoff Decide Magnitude

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--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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