Today, binary options traders have a battery of economic data, coming from all over the world. In the early morning hours, the PMI figures for the Eurozone have been released. The composite indicator was expected to show that the manufacturing and services sectors shrank at the fastest pace in there years. And the actual readings were much in line with analysts’ expectations. The previous readings were slightly revised upwards, but the figures for May disappointed the investors. German and French PMI data have been released too, with the German figures coming worse than expected, while readings for the manufacturing and service sectors of the French economy surprised on the upside. We also saw the current account surplus of the Eurozone countries declined to 4.6B from the record high April reading of 10.3B. Eurostat’s consumer confidence report is scheduled to be released later today and analysts’ projections are tha we may see deterioration in that direction.
The main driver behind the euro’s price movement continues to be the risk appetite among investors, despite the released fundamental data today and earlier this week . Near-term correlation studies suggest that interest rate expectations are affecting the search of risky assets among investors, so the increasing number of signs that the recession is deepening are likely to weigh on the single currency, as ECB will probably stick to its loose monetary policy in the near term. The weak economic data is likely to have a negative impact to the sentiment at large, as a recession in the currency bloc represents the most significant headwind for global output this year. Stocks-linked FX such as the Australian and New Zealand Dollars will probably be among the biggest losers if we continue to see weakness across the board.
The Euro-zone Finance Ministers are due to begin a two-day meeting in Brussels next week, which will draw the attention of all investors around the globe. The meeting comes after the G20 summit held in Mexico earlier this week, where EU policymakers faced heavy pressure from global leaders to use all the necessary tools at their disposal to limit the impact of the bloc’s debt crisis to the global economy as a whole. Even though, concrete suggestions will probably be presented at the EU summit next week, traders will pay close attention to sideline commentary for early clues.
Spain is also scheduled to release audit reports, whose purpose is to put a firm price tag on recapitalizing the country’s banking sector. A number above or very close to €100 billion – the upper limit of the bailout package that was granted by the Eurozone last week – is likely to prompt a fresh new wave of risk aversion among market participants.
Traders are also eyeing the results of the bond auction offering 2014, 2015 and 2017 notes today as yield readings will provide some clues to the ability of the Spanish government to meet its liabilities. After the record high yield on the benchmark 10-year bonds that have been sold on Monday, a rise in yields of the short-term paper may be seen as a confirmation sign of Spain’s debt refinancing difficulties.
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.