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Euro daily update for 4th October 2017


The euro is bouncing back this morning, after entering oversold conditions earlier in the week. In news, the political drama in Catalonia continues. Puigdemont, the regional parliament's current leader, recently told the BBC that he would be looking to declare independence in a matter of days. In our take on the subject yesterday, we wrote that while  Catalonia has had a muted impact on the euro so far, the real risks will unfold later this week. If Puigdemont follows through on his intent to declare independence, the risk of violence and continued instability will rise accordingly. 

EUR/USD is now trading above 1.1760, having bounced off 1.17 yesterday. Looking at EUR/JPY, the pair has been flat for several days in a row now, with the pair currently around 132.50. 

In economic data, Monday's manufacturing PMIs and unemployment figures both missed expectations (but to a very small degree). Unemployment came in at 9.1% vs. 9% expected while Markit manufacturing PMIs came in at 58.1 vs. 58.2 expected. Yesterday, producer prices beat expectations (2.5% vs. 2.3% expected) suggesting that rising inflation may be around the corner. Finally, on Thursday we'll see Markit composite PMIs and Eurozone retail sales figures. 


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