By FX Empire.com
The jitters and fears are controlling the market with all the eyes still focused on the meetings in Brussels with investors still mixed and uncertain which directly reflected on the EUR/USD.
All eyes remain on the summit and what the leaders will finally present. The leaders are not expected to disclose any information until late Wednesday which now as Europe exits the market leaves the reaction a key mover on Thursday as well, and likely for the coming period!
Choppy trading is evident with the parliament in Germany approving the space for Merkel to work on plans to expand the EFSF which excludes any more support from tax payers money. The options are available for the fund to be leveraged as a form of insurer and also an investment fund to purchase debt from the market and from governments.
The market is expecting the fund to not be short of a trillion and for banks support to at least come at 100 billion which is still below the earlier estimates of 200-300 billion. The final decision on Greece is also not finalized and investors want to see if there will be a haircut on the bonds which now is expected around 50%.
To the end of the European session on Wednesday investors turned more fearful and pessimistic and started to see little hope that the summit will present anything and that the measures will fall short of expectations which is pressuring the euro lower and for sure will send it further and violently lower if that fear materialized by the end of the summit.
Thursday will be a critical day with the focus still on the outcome of the summit alongside key GDP figures from the US which are likely to go unnoticed if indeed the EU leaders wasted the magic chance they have to quell the fears.
The euro zone confidence figures for October are due at 09:00 GMT. The Business Climate Indicators is expected to weaken further to -0.15 from -0.06, the Economic Confidence is expected to drop to 94.1 from 95.0 while Industrial Confidence is expected to fall to -6.5 from -5.9 and the Services Confidence will decline to -1.3 from 0.0. Consumer Confidence is expected unrevised from the advanced estimate at -19.9.
Germany’s Consumer Price Index advanced reading for October is due and likely maintained the same gain from the previous month with 0.1% rise on the month and 2.6% on the year. In EU Harmonized terms expected to ease on the month with 0.1% gain following 0.2% rise and on the year to fall to 2.8% from 2.9%.
Critical growth data is lined for release from the United States at 12:30 GMT. The economy is expected to expand by 2.3% in the third quarter after 1.3% and personal consumption is expected to strengthen to 1.9% after 0.7% the second quarter. The Core PCE on the quarter is expected to ease to 2.2% from 2.3% the previous quarter.
The weekly jobless claims are also due as always the same time for the week ending October 22 after they dropped last week to 403 thousand.
The pending home sales for September are due at 14:00 GMT and expected with 0.1% rise after 1.2% drop.
Read more about the Forex Market here.
