MARKET OUTLOOK - PMI Data to Encourage ECB to Further Cut Rates

Forex - Jack Allen-Reynolds from Capital Economics stated that the European Central Bank is likely to be further encouraged to lower interest rates after the preliminary purchasing managers' index data indicated that Eurozone activity continued to slow down this month. Allen-Reynolds noted, “The PMI is still lower than in October and remains consistent with past patterns of economic contraction.” In a note sent to clients, he emphasized that this will strengthen the view among ECB policymakers that last week's move to reduce borrowing costs should be accompanied by further cuts in interest rates.