Euro looks beyond Germany to Italian bond sale outcome
German Unemployment figures headline the economic calendar in European hours. A rise in the number of unemployed would confirm a slowdown in growth. More closely watched however will be the Italian 5-year and 10-year bond auction today at around 10:00am as it is a key test for the recent trend of lower yields due to strong demand for eurozone peripheral debt.
The US economy grew more then first estimated in the second quarter according to the Commerce Department. The US grew by an annual rate of 1.7%, more than the 1.5% previously estimated, reflecting an improvement in the trade deficit and a pickup in household spending. This is a slowdown from 2% in the first three months of the year. Nonetheless, the US Congress’s budget office last week warned that spending cuts and tax rises could trigger a sharp economic slowdown in 2013.
Later in the day, the spotlight turns to the US data docket, where July’s Personal Spending and Income figures as well as Augusts’ Kansas City Fed Manufacturing Activity gauge are on tap.
Euro-dollar is back down to $1.2536 but otherwise is trading in a fairly tight range ahead of this morning’s releases while GBP/EUR broke back through the €1.26 level. Currency markets remain in a holding pattern ahead of Friday’s highly-anticipated speech from Fed Chairman Ben Bernanke at the Jackson Hole Symposium.
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