Spanish bond sales
Today market attention will be on the Spanish 10-year bond auction and should demand prove to be poor, the euro could come under major pressure.
The recent trend of deteriorating indicators out of the eurozone continued yesterday with German industrial production which fell sharply. The 2.2% increase seen in March was completely erased by a fall in April of the same size.
While rates were kept unchanged by the ECB yesterday, the tone of the associated press conference was more pessimistic about future growth prospects and the ECB indicated it was ready to take action if matters deteriorate abruptly. When pressed on possible rate cuts, ECB president Draghi dampened expectations of an imminent cut, explaining the main policy focus is on boosting the quantity of money as opposed to the price of money.
After a dismal April, the UK high street bounced back in May as warm, sunny weather tempted shoppers to stock up on summer clothes and food and drink. According to the British Retail Consortium, the value of sales rose by 1.3% compared with a year earlier and retailers will be hoping the Queen’s Diamond Jubilee, together with Euro 2012 and the Olympics will give the high street a much needed boost.
UK PM Cameron is due to visit Chancellor Merkel in Berlin today to press for a recapitalisation of the banking system and a solution to the sovereign debt crisis in time for the G20 summit in Mexico on 18-19 June.
Elsewhere Australian employment figures came in far stronger than expected giving AUD yet another boost.
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