Good Morning, traders!
The forex market begins trading with a risk-on sentiment as the US-China phase-one deal agreed on Friday by both parties removed the uncertainty from the market.

This raised the risk-appetite in the market and hence supported the upward trend in risk assets like the stock markets.

Besides, the US dollar was under pressure after the release of weak Retail Sales data on Friday. At 18:30 GMT, the Core Retail Sales from the United States dropped to 0.1% for November from the expected 0.4%. The Retail Sales for November also showed a decline to 0.2% from the forecast 0.5% and weighed on the US dollar.

Watchlist – Economic Events Outlook

The European economy is due to release a series of economic events, which mainly include the Manufacturing and Services PMI data.

What is PMI?

Firstly, let me help you understand what these PMI figures are. PMI stands for Purchasing Managers’ Index, and it’s a leading indicator of economic health – businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Derivation & Impact
It’s a survey of about 300 purchasing managers, which asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories. Purchasing managers are the initial people to react to slow market conditions, as they reduce demand if they feel less optimistic or uncertain about the economy.

The PMI figures have a standard threshold of 50. Above 50.0 indicates industry expansion, while below symbolizes contraction. So today, all the PMI figures that come below 50 are going to weigh on the single currency Euro. Brace yourselves.

French Flash Manufacturing PMI – The figure is due at 08:15 GMT with a forecast of 51.5 vs. 51.7 during the previous month.

French Flash Services PMI – Besides the French Manufacturing PMI, the services PMI will be observed. It’s expected to soar slightly to 52.1 vs. 52.2.

German Flash Manufacturing PMI – The data will be released at 08:30 GMT, around 15 minutes after France’s figures. Germany is one of the biggest business hubs of the Eurozone, but it’s been struggling with the manufacturing figures. Since Q4 2018, the PMI figures are staying below 50, which show slacks in the German manufacturing sector. Even now, in 2019, the German manufacturing PMI has dropped gradually from 49.9 in January to 41.9 in November.

The economy is expected to show a slight surge in PMI figure from 44.1 to 44.6, which is likely to support the single currency Euro.

German Flash Services PMI – On the other hand, Services PMI is scheduled with a forecast of 52.0, slightly above the previous month’s figure of 51.7.

Flash Manufacturing PMI – At 9:00 GMT, Markit is due to release Flash Manufacturing PMI with a positive forecast of 47.3 vs. 46.9 during the prior month.

Although it’s below 50, it may not place any significant impact on the market as speculators have already priced in the 47.3 figure. By any means, if the number crosses 50, we may see some great price action in the Euro today.

Flash Services PMI – Alongside the flash services, PMI stays over 50 and is expected to be 52.0. It’s slightly above the previous month 51.9 but may not place any significant impact on the market.

US Dollar – USD

Flash Manufacturing PMI – Besides Eurozone, the US economy is also due to report flash manufacturing PMI figures at 14:45 GMT. The United States is struggling with its PMI figures lately, perhaps in the wake of the US-China trade war. Even the current month’s PMI figure is expected to be 52.6, which is the same as the previous month.

Good luck today, and see you soon with the next update!