Saxo Bank Head of FX Strategy John Hardy reports that the euro continues its ascent despite Italian yields continuing to rise with key EURUSD flashpoints at 118.25, 119.25, and of course 1.20.
Article / 26 June 2013 at 5:29 GMT

3 Numbers to Watch: German Cons. Confidence, French GDP, US GDP

Blogger / MoreLiver's Daily

Today is a slow day on the macro number front, after yesterday’s positive data surprises from the US and before Thursday's European numbers. The European finance ministers convene today for a pre-meeting before the actual leader’s meeting on Thursday and Friday. Bond markets have already been nervous enough, and there are little signs that the meetings will result in an agreement on the banking union. Thus, any statements later today could provide more information on whether the ‘Cyprus model’ of little or no EU taxpayer money is the way forward, which would be negative for the crisis countries’ bond markets. A positive for the day will be China’s central bank, which announced late on Tuesday that it will provide liquidity if and when necessary – surely a relief to the stressed interbank markets – both Reuters and Bloomberg have the story.

Today’s other events include the Bank of England’s latest Financial Stability Report at 09:30 GMT,  probably calling for capital strengthening of the island nation’s banks. Also of interest is a speech by European Central Bank’s Mersch at 15:15 GMT.

German June GfK Consumer Climate Survey (06:00 GMT). The consensus forecast for June is 6.5, unchanged from May, but at the highest level in almost six years. German consumers are very optimistic indeed: interest rates are very low, unemployment is near the lows seen in two decades, inflation is minimal and considerable wage increases have been agreed upon. Never mind that the economy is barely growing – as long as the German risks from the euro crisis are seen to be contained, the general population is happy. Higher confidence should be seen as positive for the euro, as only a serious downturn would push Germany to accept new unconventional monetary measures from the European Central Bank – all of which would weaken the euro. Also, optimistic households effectively guarantee smooth elections and a new term for the Merkel-led coalition.

 GER GfK Sentiment

French Gross Domestic Product (06:45 GMT). GDP is expected to have fallen by 0.2 percent on a quarterly basis, and 0.4 percent on an annual basis. This is the final revision to the first quarter data, and only a small revision to the annual growth number (previously -0.3 percent) is expected. The slightly negative and thereby recession like growth rate is a reminder that Europe's problems are hardly solved, and even the core countries are vulnerable to the crisis and policy errors.

 France GDP

US Q1 Gross Domestic Production third estimate (12:30 GMT). No major changes are expected to the first quarter’s data. Breaking up the GDP numbers to contributions shows that both personal consumption and private investments have been growing at above-average rates, but weak exports and especially the fall in public spending and investments drops the total GDP growth number below its long-term average. Should the private sector consumption and investment growth rates fall to their long-term averages, the overall growth rate would be one percent lower than currently; just something to think about as mortgage rates have risen and refinancing at lower rates has provided households with more spending power.

US GDP Contributions


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail