EUR/USD is trading a little firmer this morning, up at 1.5080 from a North American close Wednesday down around 1.5040. The pairing has been underpinned by a fairly decent bout of EUR/JPY buying. The cross is up at 132.40 from around 131.50.
Big day, ECB rate decision and plenty of data to keep market participants on their toes;
07:45 GMT: French ILO unemployment Q3 expected 9.9% from 9.5%, mainland unemployment expected 9.3% from 9.1%
08:45 GMT: Italian November services PMI expected 52.2, unchanged from previous read
08:50 GMT: French November services PMI (final) expected 60.4
08;55 GMT: German November services PMI (final) expected 51.5
09:00 GMT: Euro zone November services PMI (final) expected 53.2, composite 53.7
10:00 GMT: Euro zone Q3 GDP expected +0.4% q/q, -4.1% y/y
10:00 GMT: Euro zone retail sales for October expected +0.2% m/m, -2.4% y/y
12:45 GMT: ECB rate decision 1%
13:30 GMT: Trichet press conference
Regarding ECB rate decision. Market will be looking to see whether there’s a shift in the terms at which the ECB offers funding to banks on a long-term basis. Options: add a spread to the 1% refi rate; index the rate; or make it float.
Any one of the above would be seen as a first step to tightening super-loose monetary policy and would be bullish EUR/USD.
What is fully expected is for the ECB to end the 1 year refinancing after the December auction, and reduce the number of 3-month tenders.
European stocks look set to open firmer this morning.
Sell orders seen up at 1.5100 and then 1.5125 through 1.5150, where option barriers well-touted.