PMI Data to Kick Off New Month

The flash CPI estimates released for the Euro Area on Friday showed headline CPI estimates to have remained flat at 0.00%, while core CPI increased to 1.00%, rising above estimates and up from last month's 0.90% print. While the modest uptick in the core CPI reading might be something to cheer about, inflation remains at the same levels recorded since the ECB started its massive bond purchase program. In light of the CPI estimates, the focus turns to Draghi's speeches during this upcoming week where he is due to present at the ECB banking forum in Frankfurt. The markets will be carefully watching for any new hints from Draghi as far as strategies for tackling inflation and the steps the ECB will need to take thereof. EURUSD closed Friday's session on a bullish note, trending marginally above the 1.1000 psychological level.

Manufacturing data from China released over the weekend saw a softer than expected reading with the manufacturing PMI for October printing at 49.8, missing estimates of 50.0 and staying at the same level compared to the previous month. The subsequent non-manufacturing PMI was also a resounding disappointment, printing at 53.1, below estimates of 53.4. The Caixin manufacturing PMI released earlier in the session today showed a modest improvement to 48.3, above estimates of 47.5 and up from 47.2 previously but nevertheless remaining in contractionary territory. The vulnerable manufacturing sector is likely to keep the pressure up for the PBOC which has delivered rate cuts and has decreased reserve ratio requirements multiple times over the past year. The Yen was trading stronger on the data with USDJPY trending near 120.31 after opening the week, gaping lower to 120.34.