German flash PMI beats estimates, buy EUR/USD?
Germany’s SPD leader Martin Schulz is said to be ready to start talks with Chancellor Angela Merkel and is prepared to offer her limited support for a fourth term as reported by Bloomberg.
- Schulz could back Merkel in a minority government but will not offer another grand coalition, according to Bloomberg.
- If this were to happen, this will avoid an extreme German political turmoil, paving way for ECB to tighten monetary policy in future. This is seen as a bullish sign for EUR/USD.
- Germany’s November flash manufacturing PMI is reported at 62.5, higher than earlier estimates of 60.4. In addition, new orders rose to 63.7 vs 60.4 in October one of the highest reading since March 2010.
- The details of the PMI survey also indicated that a robust recovery is underway.
- Our chief strategist was interviewed by Bloomberg TV yesterday, and said “For now, any dips in EUR/USD could offer buying opportunity”.
- FOMC minutes last night reiterates the stance of a gradual hiking next year, limiting the gains in Dollar.
- EUR/USD may climb towards 1.1880.
