Euro area PMI data for October in focus

Friday

The dollar is holding steadier once again to start the day, building a little more on its gains from trading yesterday amid calmer tones in the market so far today.

US stocks had a messy day to sort through headlines yesterday but ultimately closed higher, although hopes for a stimulus deal before the election continue to be nullified.

Meanwhile, US futures are now keeping little changed, recovering from a slight loss as the second presidential debate ended up being a much calmer affair.

The lack of drama means that this won't be the last we have heard from both candidates ahead of election day and the market can breathe a little easier for now.

That said, I'm still not entirely convinced that the market has seriously priced in risks of election uncertainty and also the risks of either Trump or Biden winning.

Stimulus talks have largely helped to distract from that and may steal the spotlight when digesting the election results, but what comes after still needs to be a consideration for investors when looking at the big picture of things.

Looking ahead, European assets will come into focus amid the release of the latest round of PMI data in the region. The virus situation has escalated significantly and is likely to weigh further on Q4 sentiment. Let's see if we will get confirmation of that.

0600 GMT - UK September retail sales data

Prior release can be found here. Retail sales activity is estimated to have improved a little more at the end of Q3 as consumption is seen holding up. That said, there are still questions surrounding the general recovery in the UK going into Q4 - especially with the furlough program expiring next week. So, it remains to be seen how well can overall economic conditions be maintained towards the year-end.

0715 GMT - France October flash manufacturing, services, composite PMI

0730 GMT - Germany October flash manufacturing, services, composite PMI

0800 GMT - Eurozone October flash manufacturing, services, composite PMI

As a whole, euro area economic activity is expected to slow in both the manufacturing and services sectors this month. This comes amid the backdrop of a worsening virus situation across the region, and that may temper with the pace of the recovery in Q4. Should the data come in worse-than-expected, it could have the potential to weigh a little on the euro and risk assets later in the session.

0830 GMT - UK October flash manufacturing, services, composite PMI

Prior release can be found here (manufacturing) and here (services). The recovery in overall business and economic conditions is expected to lose more traction this month, with the virus situation leading to local lockdowns not helping with the mood in the UK. That will present more questions surrounding the economy in Q4 with there still being doubt as to whether Sunak's latest measures are sufficient to cope with the end of the furlough program.

That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.