[FBS]

Dec. 19: European session

EUR/USD is trading in the $1.3680 area after it tested $1.3648 today. Data from the region are generally good, but the market expects news from the region’s leaders.

European leaders meet
Today is the meeting of the European Council. According to ANZ, there’s “a little bit of event risk tonight in the sense there’s a European leaders summit where they’re supposed to come up with proposals for a banking union. The risk to me is downside in euro for the next 24 hours.” However, German finance minister Schaeuble said that “convincing” agreement is reached on banking union backstop failed banks. Expect more on this topic today.

Euro zone’s current account surplus rose
Euro zone current account balance in Oct +26.2bln vs. +14.2B forecast

Ireland: surprisingly good growth
Irish GDP rose by 1.5% in Q3 vs. 0.7% forecast

German inflation
According to IFW Kiel institute of world economic research, German inflation in 2015 will be 2.5% (higher than the 1.90% forecast). As German policymakers are known for their fear of inflation, they might call ECB for tighter policy (potentially EUR-positive).

Greece: unemployment edged down, but remains high
Greek unemployment 27.0% in Q3vs. 27.1% prior

GBP/USD is consolidating in the $1.6360/6400 range after the yesterday’s post-FOMC jump to $1.6485. UK retail sales rose in line with forecast by 0.3% in November (vs. a 0.9% drop in October).