Poor German Auction & Weak Data Send EUR Below 1.34

Weak demand resulted in a poor German bond auction; Eurozone industrial new orders plunged; MPM minutes show no votes for more QE. Market turns to durable goods orders, jobless claims, core PCE price index and UoM consumer confidence.

The greenback is the relative strength winner in the ongoing session as risk aversion heightens. EUR and NZD are the biggest losers. Major European equities recovered most of their losses but remain in negative territory.

A combination of disappointing German bond auction with weak data sent Euro lower today. Germany sold only EUR 3.64 bln worth of 10 year bund today while it targeted EUR 6 bln. The Bundesbank retained EUR 2.35 bln that it will attempt to sell over the next few days. The average yield was 1.98% compared to previous 2.09% with weak bid to cover of 1.07.

September Eurozone industrial new orders were significantly below expectations as they plunged -6.4% from previous +1.4% which translates to a mere 1.6% growth y/y (down from Augusts' 5.9%). This is the biggest decline in three years and confirms bleak outlook for Eurozone manufacturing sector. EURUSD fell on the news from 1.3450 to 1.3374.

The Minutes from November MPC meeting showed that all members voted to keep rates steady and there were no votes for more QE. However, some members noted that more bond purchases may be needed in the future. Current QE will continue for additional three months.

Trading during the NY session will be influenced by a large number of data releases. At 8:30 am ET October durable goods orders are due and are seen lower at -1.1% from -0.6% (core orders are expected to grow only 0.1% from previous 1.8%)

Due to tomorrow's Thanksgiving holidays, jobless claims are due today and are seen at 389K from 388K. For the past three weeks, claims have been below the 400k mark.

FED's preferred inflation gauge, the core PCE price index is seen higher in October at 0.1% from previous 0.0%.

Final revision of November UoM consumer confidence is due at 9:55 am and is anticipated to increase to 64.5 from initial estimate of 64.2.