EUR/USD is almost unchanged in the Wednesday session. Currently, the pair is trading at 1.1338, down 0.05% on the day. On the release front, German and eurozone services PMIs both softened in November. German Final Services PMI dropped to 53.3, matching the estimate. Eurozone Final Services PMI dipped to 53.4, above the estimate of 53.1. Eurozone retail sales posted a gain of 0.3%, marking a 4-month high. This beat the estimate of 0.2%. On Thursday, OPEC members are meeting in Vienna. The US will release ADP nonfarm payrolls, unemployment claims and the ISM Non-Manufacturing PMI.
In France, the ‘yellow vest’ protests are continuing, despite the about-face by the government, which agreed to suspend a controversial fuel tax. The riots have paralyzed Paris, and hotels and restaurants have been particularly affected. The demonstrations began in protest of the fuel tax, but have grown into a massive protest against the Macron government. If the protests continue, French GDP for the fourth quarter could be negatively affected.
German Services PMI dropped to its lowest level since April, as the eurozone’s largest economy continues to post weak numbers in the fourth quarter. On Monday, Manufacturing PMI dropped to 51.8 in November, down from 52.2 points in October. This marked a fourth straight downturn and was the lowest reading since April 2016. The global trade war has taken a bite out of German exports and a slowdown in the eurozone economy has dampened manufacturing growth in Germany. Consumer indicators are also pointing downwards – last week, GfK Consumer Climate dipped to an 18-month low. while retail sales fell by 0.3%, its first decline since July. Consumers are holding tighter to the purse strings, which is hurting economic growth. This does not bode well for the eurozone economy, as the German economy is often a bellwether for the rest of the eurozone.
