Single Currency Is Subdued by Catalonia Woes

The euro/dollar pair has dropped 0.09% and it’s trading at 1.1700. Recently, the single currency hit the 5-month minimum of 1.1685. It is subdued by a continuing controversy about Catalonia’s independence. On Monday, the Catalan government will meet and discuss declaration of independence. But, Spanish government might prevent the meeting as it has already gotten a court order and it Catalan lawmakers don’t follow it, they would be arrested. What will Catalonia’s response be, we can only guess. German Factory Orders rose 3.6%. The US is about to release Non Farm Payrolls and Average Hourly Earnings.

Fed’s John Williams, Esther George and Patrick Harker acknowledged the need of moderate and careful rate hike in the short to medium term. Fed fund futures are pricing in 81% odds for December’s rate hike. Inflation is still a problem for the Central Bank. Also, Donald Trump is about to pick Janet Yellen’s follower. The list includes: Kevin Warsh, Jerome Powell and Gary Cohn.