Euro zone PMIs in focus The euro sold off in early trade yesterday. This followed reports from the Spanish news agency EFE that eleven European banks have failed the latest series of stress tests. The full set of results isn’t due to be released until Sunday. However, in true EU fashion there’s no harm in stage-managing events with a well-placed leak to ensure that market participants aren’t caught off guard to any appreciable degree. Of course, on one level it could be seen as terrible that 6 years on from the Global Financial Crisis that there are European banks that still haven’t managed to sort themselves out. However, it is quite likely that the true situation is even worse than suggested by this latest round of stress testing. Maybe the eleven banks who failed the tests just lack the clout and connections to be given a free pass? The EURUSD took a larger hit after the release of September’s US Consumer Price Index (CPI). The headline inflation number came in at +0.1% which was a touch above the consensus market expectation of a flat reading. But it was also a significant pick-up from August’s 0.2% fall, and was enough to provoke some knee-jerk US dollar buying from those who still cling to the belief that the US Federal Reserve is seriously considering raising rates any time in the near future. Sterling lost ground after minutes from the last Bank of England meeting showed that its Monetary Policy Committee (MPC) saw little evidence of growing inflationary pressures. The news suggested that there was scant enthusiasm within the MPC for tightening monetary policy. Overnight China’s HSBC Flash Manufacturing PMI came in at 50.4 which was a touch above the 50.2 anticipated. However, the previous month’s number was revised lower to the same degree and all-in-all there was little market reaction. Later today we have Manufacturing and Services PMIs from France, Spain, Germany and the Euro zone. We also have UK Retail Sales, Mortgage Approvals and CBI Industrial Order Expectations. There is also an EU Economic Summit and from the US we have Weekly Jobless Claims, Manufacturing PMI and the CB Leading Index.
Posted on: Thu, 23 Oct 2014 08:12:35 +0000
Trending Topics
Recently Viewed Topics
© 2015