By TraderVox.com
Tradervox.com (Dublin) – With Greece and troika divided on the labor reforms and the fragile situation in Greece, there is little hope for a deal. The US Non-Farm Payrolls impressed last week, pushing the pair down considerably.
On Monday, the Spanish Unemployment Change report was released which failed to impress. The US ISM non-manufacturing fell to 54.2 in October from 55.1 registered in September, increasing the demand for safety ahead of the US election.
The market is volatile as we head to the US election. Reports suggesting that European Central Bank was lenient with Spanish banks in offering collateral rules have also weighed down on the market, pushing the euro down against the dollar.
The euro area sentix investor confidence report showed an improvement yesterday, reaching -18.8 in November from last month’s -22.2.
Investors will be focused on several reports and events today, the major one being the US election. The incumbent president, Barrack Obama is seeking a second term and is competing with Mitt Romney. The major issue is the fiscal cliff which, if not avoided, will bring automatic tax hikes and severe spending cuts starting in 2013.
In Europe, the market will be following Italy to get the reading from Services PMI report which will be released at 0845hrs. The sector improved in September reaching a reading of 44.5 from 44.0 the previous month. The market expects the sector to remain in contraction this time round, with no change expected on the figure.
Another report that will be in focus is the German Factory Orders report which will be released at 1100hrs GMT. The orders declined in August, falling by 1.3 percent after appreciating by 0.3 the previous month.
The market predicts a further 0.7 percent decline, signaling that Germany’s economy is starting to succumb to the effects of the debt crisis in the region.
The dollar is expected to appreciate today against the euro as safety demand continues to grip the market. The US dollar index rose yesterday to a two-month high as euro and yen weakened. The dollar appreciated against the euro to close the day at $1.2767.
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