The market has clearly revived, which is largely facilitated by the published macroeconomic data, and the significance of which is growing day by day. Moreover, it is noteworthy that, in fact, the single European currency remained virtually unchanged, having made a short movement upwards, it then returned to where it started. However, the pound was able to consolidate its success, and the merit in this belongs to purely political factors. Indeed, there is less and less doubt about the victory of the conservatives in the early parliamentary elections every day. Business is optimistic about the victory of Boris Johnson, considering it a much lesser threat than Jeremy Corbyn. The most important thing for business is that it is clear to everyone what Boris Johnson will do after the victory, which means there is no uncertainty. In current realities, investors perceive this as an extremely positive factor. But, the pound had one more reason for joy. We are talking about business activity indices, which, although they have declined, are not as strong as expected. Thus, the index of business activity in the service sector, just like the composite index of business activity, decreased from 50.0 to 49.3, although the fact is that it was supposed to decrease to 48.6 in the service sector, while to 48.5 in the composite.

But unfortunately, the behavior of the single European currency is somewhat discouraging, since its growth is understandable, in contrast to the subsequent return. The growth is due to the publication of totals for business activity indices. Thus, the index of business activity in the services sector, although it has decreased, is not from 52.2 to 51.5, but to 51.9. At the same time, the composite business activity index, which was supposed to decline from 50.6 to 50.3, remained unchanged. Now if you look at the largest economies of the euro area, then everything is not so clear. So, in Germany, the index of business activity in the services sector grew from 51.6 to 51.7, although it was supposed to drop to 51.3. The composite index of business activity grew from 48.9 not to 49.2, but to 49.4. But in France, everything is completely wrong, because the index of business activity in the service sector fell from 52.9 to 52.2 instead of remaining unchanged. As a result, the composite PMI, which was supposed to rise from 52.6 to 52.7, suddenly fell to 52.1.

Composite Business Activity Index (Europe):

However, what happened afterwards is completely out of the general idea of logic, since the dollar began to strengthen at the time of publication of ADP employment data. But employment grew by only 67 thousand, while they expected growth by 145 thousand. Moreover, the previous results were revised from 125 thousand to 121 thousand. In other words, employment is growing much slower than not only forecasts, and even what was considered already a fact. Thus, the situation on the labor market is clearly not as magical as previously assumed. That's all ahead of Friday's publication of the United States Department of Labor report. Thus, the growth of the dollar seems irrational at that moment.

Employment Change from ADP (United States):

In here, all questions disappear, with only one glance at the final data on business activity indices, since the composite business activity index grew from 50.9 to 52.0, while growth was expected to reach 51.9. The index of business activity in the service sector, as expected, rose from 50.6 to 51.6. In addition, do not forget that the ADP data do not yet give an unambiguous answer to the question of what the contents of the report of the Ministry of Labor will be, and forecasts for it have not yet been revised.

Composite Business Activity Index (United States):

Today, we are waiting for an equally busy day, as the latest estimate of the GDP of the euro area for the third quarter is published. There is practically no doubt that it will confirm the assumption that Europe's economic growth is unchanged once again, which are really quite modest, and make up only 1.2%. At the same time, the market is unlikely to somehow respond to these data, since this fact was put into the value of the single European currency even at the time of the publication of the previous assessment. However, data on retail sales, whose growth rates should slow down from 3.1% to 1.8%, are not of little interest. Considering the fact that retail sales account for a huge part of the service sector, which accounts for more than half of the economy of most countries of the world, the slowdown in sales growth rates rather indicates that the pace of economic growth in Europe will only slow down.

Retail Sales Growth (Europe):

However, what is much more interesting is the American statistics, which can significantly ruin the life of the dollar. Let's start with the fact that the total number of applications for unemployment benefits should increase by 70 thousand. Thus, the number of initial applications may increase by 13 thousand, and repeated, by another 57 thousand. In the light of yesterday's ADP data, data on applications for Unemployment benefits will inevitably lead to increased concerns about the content of tomorrow's report by the Ministry of Labor. The data on production orders, the volume of which should increase by 0.5%, can only slightly smooth out the negative emotions that investors will experience when they see data on applications for unemployment benefits.

Production Orders (United States):

For the single European currency, it will first be fixed in the region of 1.1075, but will end the day at 1.1100, if all forecasts come true.

With the pound, everything is somewhat more complicated, since it is seriously influenced by purely political factors. If they are pushed back, then the pound should strengthen today by virtue of only one American statistics which is what it is already doing, due to all the same political factors. Thus, we should expect further growth of the pound to 1.3175. Nevertheless, do not forget about its significant overbought, and at least one negative news should appear, as we will see its rapid decline in the direction of 1.3000.