These are stories Report on Business is following Monday, Nov. 3, 2014.

Follow Michael Babad and The Globe's Business Briefing on Twitter.

Speculators eye euro

The euro is in the crosshairs of speculators amid the grim economic outlook for the countries that share the currency.

Story continues below advertisement

The latest report from the U.S. Commodity Futures Trading Commission, released late Friday, shows the net short position in the euro swelling by about $1-billion (U.S.) to $26.4-billion, the widest in two years.

"The position is large and vulnerable to short covering; however, as the position is still building each week, the risks lie to further near-term EUR downside," said chief currency strategist Camilla Sutton of Bank of Nova Scotia, referring to the euro zone's currency by its symbol.

Today, the euro is at its lowest level in two years.

Growth has stalled in many euro zone countries, inflation is low at 0.4 per cent, and unemployment is at a crippling level of 11.5 per cent.

Indeed, the focus will turn again this week to the region as European Central Bank chief Mario Draghi and his colleagues hold their policy-setting meeting.

"The ECB has tried pretty much everything else to stimulate the euro zone economy and stop the region falling into the grips of deflation but as of yet, we're not seeing the benefits," said research analyst Joshua Mahony of Alpari in London.

"I'm not convinced that we'll ever see quantitative easing from the ECB and I very much doubt it will come at this meeting," he added.

Story continues below advertisement

"That said, Draghi does love to shake things up from time to time and is not afraid to go large … Whether the ECB announces any change to monetary policy or not, you can usually bank on market volatility around these announcements and, in particular, the press conference shortly after."

The U.S. dollar has been rallying again, while the Canadian currency holds its own below the 89-cent mark.

The short position in the loonie, as Canada's dollar coin is known, is just shy of $2-billion, with speculators cutting both long and short positions, according to Ms. Sutton.

Markets soft

Investors are kicking off November in a downbeat mood.

Global markets are largely on the decline this morning after Friday's sharp rise.

Tokyo's Nikkei was closed, while Hong Kong's Hang Seng lost 0.3 per cent.

Story continues below advertisement

In Europe, London's FTSE 100, Germany's DAX and the Paris CAC 40 were down by between 0.6 per cent and 0.7 per cent by about 8:45 a.m. ET.

S&P 500 and Dow Jones industrial average futures were also down, though slightly.

Having said that, we'll see what the week brings, given that stocks are at such elevated levels.

"The S&P 500 is opening at record highs after last week's 2.7-per-cent sprint – thanks to Japan's government actions (more QE and more investment in foreign stocks markets) and to a solid Q3 earnings season (with S&P 500 earnings tracking 7.5 per cent year-over-year compared with 4.5 per cent expected initially, according to FactSet)," said senior economist Sal Guatieri of BMO Nesbitt Burns.

"Stocks are now entering their best three-month season (November to January) and also the historically favourable post-midterm election period," he added.

"The dash back into equities lifted 10-year Treasury yields five basis points last week to three-week highs of 2.33 per cent, while the flight into U.S. dollars sent gold prices careening to four-year lows below $1,170."

Story continues below advertisement

Streetwise (for subscribers)

ROB Insight (for subscribers)

Business ticker