Wednesday 1st October saw European equities moving sideways while the Euro sells off sharply as a result of yet weaker macro data highlighting further growth challenges in the Eurozone, a point the ECB will more than likely address at its meeting tomorrow.
European Manufacturing PMI slipped to 50.3 compared to a previous estimate of 50.5 creating worrying signs for the region’s Manufacturing Sector as orders appear to be diminishing for the first time since June 2013 leading to major concerns that output could follow suit.
The Stoxx Europe 600 was down less than 1 point at 343.02, as investors appeared to stay on the side lines before the ECB policy announcement tomorrow.
The Euro has been hit badly for the third straight week continuing its steep downward trend in Q3, falling to its lowest level in 2 years, now trading below the 1.26 handle at 1.2594, edging towards the major historical pivot level of 1.2460 where we could see some contradictory price action.Will the currency bounce off this level or if broken we could see a major currency bloodbath as uncertainty in the Eurozone doesn’t seem to be going away anytime soon. Only time will tell, what we do know, however, is that we will know more following Draghi’s speech tomorrow.