f-man
4Xangels Representative
- Messages
- 744
-On Friday the markets saw mixed data resulting in se sawing sentiment. On the negative side we saw weaker than expected activity data in China as industrial production, retail sales and inflation all miss forecast. Meanwhile there was the continued uncertainty in Greece that appears to be ongoing. However, this was countered by an unexpected improvement in the University of Michigan consumer sentiment survey and a second consecutive strong increase in employment in Canada.
-Producer prices in the UK also declined by 1.5%. After the unexpected double dip recession in the UK combined with the fall in inflation, there will be a lot of focus on the BoE quarterly inflation report which is due on Wednesday. The market is expecting some downgrades to both inflation and growth which could open the door for further asset purchases. In light of the current Euro crisis the Pound has been well bid. However, Sterling sellers need to be cautious as the British economy is not in a great place and has an exposure to the Eurozone. If we see a particularly bearish report on Wednesday Sterling could well weaken as a result.
-The Euro hit a 3 month low against the US Dollar over the weekend on the back of two political events. Firstly Chancellor Angela Merkel´s Christian Democratic Union party received its weakest share of the vote since World War II in a North Rhine-Westphalia ballot yesterday. Does this mean we are starting to see a change in voting behavior across Germany with regards to it views on austerity. Secondly, the ongoing talks with Greece still leaves Greece without a government and the fear if default is increasing.
-The only data of real note today is euro area industrial production for March but with the largest region figures already released this is likely to be quiet. Today also sees a meeting of the euro area finance ministers group. There will certainly be plenty for them to talk about. The group is likely to want to emphasise to Greece the implications of failing to continue with the agreed austerity measures
-Producer prices in the UK also declined by 1.5%. After the unexpected double dip recession in the UK combined with the fall in inflation, there will be a lot of focus on the BoE quarterly inflation report which is due on Wednesday. The market is expecting some downgrades to both inflation and growth which could open the door for further asset purchases. In light of the current Euro crisis the Pound has been well bid. However, Sterling sellers need to be cautious as the British economy is not in a great place and has an exposure to the Eurozone. If we see a particularly bearish report on Wednesday Sterling could well weaken as a result.
-The Euro hit a 3 month low against the US Dollar over the weekend on the back of two political events. Firstly Chancellor Angela Merkel´s Christian Democratic Union party received its weakest share of the vote since World War II in a North Rhine-Westphalia ballot yesterday. Does this mean we are starting to see a change in voting behavior across Germany with regards to it views on austerity. Secondly, the ongoing talks with Greece still leaves Greece without a government and the fear if default is increasing.
-The only data of real note today is euro area industrial production for March but with the largest region figures already released this is likely to be quiet. Today also sees a meeting of the euro area finance ministers group. There will certainly be plenty for them to talk about. The group is likely to want to emphasise to Greece the implications of failing to continue with the agreed austerity measures
