UK Services PMI Weaker; Onto US Services ISM

Spanish unemployment rises; UK services PMI weakened; week full of risk events; gold near lows. Focus turns to ISM non manufacturing. Both of the EURUSD longs were stopped out. The latest on Ashraf's take on EURUSD will be tackled in tonight's Premium Insights.

The greenback gave up a small portion of its Friday's gains during the Asian session. However, when European trading began the USD gained across the board except JPY. European equities are losing about 0.75% and the relative strength winner is JPY while GBP and NZD lag.

MNI reports that market sentiment turned sour on WSJ story that suggests that the ECB was reconsidering EUR 80 bln of held Spanish bills as loan collateral. EURUSD was already trading near session low at 1.2777 when Spanish labor market data was published. The result was far worse than anticipated as unemployment rose by 128.2K in October after rising by 79.6K in September. Nevertheless, the common currency ignored this data and has not weakened further. Later during the session, Eurozone Sentix investor confidence improved to -18.8 for November from previous -22.2.

UK service sector expanded at the slowest pace in 22 months as October PMI index fell to 50.6 from previous 52.2. Employment declined for the second month in a row but the rate of job cutting was relatively slow. New orders expanded albeit at a weaker rate. GBPUSD fell to 1.5961 while EURGBP rose back above the 0.80 figure.

There are numerous event risks this week Tuesday's RBA rate decision and US election, Mario Draghi's speech on Wednesday and the BOE and the ECB decisions on Thursday. G20 meeting in Mexico City concludes today.

Gold has been unable to regain the ground it lost on Friday and continues to trade around 1678. 100 and 200 DMA are just below, between 1663 and 1668.

The US data calendar is limited to ISM non manufacturing that is due at 10:00 am ET and is expected to decline marginally to 54.6 in October from September's 55.1. The index has been increasing steadily for four months back to back.

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